Asian Markets Trade Cautiously As UK Electoral Voting Kicks Off
- There was plenty of Asian economic news on tap, but markets largely let it wash over them
- Voting has started in a crucial UK general election and former Federal Bureau of Investigation Director James Comey will testify to the US Senate later
- The Japanese Yen survived a truly horrendous downward revision to official growth figures
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It was another mixed and narrow Asia/Pacific trading day Thursday, as it was probably always going to be.
Markets were focused on the critical UK general election in which voting is getting under way. The market consensus appears to be that Prime Minister Theresa May’s Conservative Party will win and go on to the process of Brexit negotiations. That said the polls have narrowed considerably into the vote.
Investors also awaited Thursday’s Senatorial testimony from former Federal Bureau of Investigation Director James Comey, dismissed by President Donald Trump on May 9.
Despite this watchful calm it was a full day for Asia/Pacific data. The Japanese Yen survived a horrible downward revision to its homeland’s first-quarter Gross Domestic Product figures. The Australian Dollar meanwhile took hit from a massive trade-surplus miss, although it is probable that the effects of April’s Cyclone Debbie on export infrastructure did the damage, rather than anything more sinister and long-term.
Later in the session China’s US-Dollar-terms trade balance for May was $40.81 billion. This was well below forecasts, which centered around $47 billion. However both exports and imports grew ahead of expectations. Japan’s “Economy Watchers’ survey found both current conditions and outlook optimism above forecast levels, but only just.
The UK Pound held steady close to two-week highs against the US Dollar. The foreign-exchange market was generally calm, with news of yet another North Korean missile test passing it by.
Gold prices edged lower in the Asian session, but only by about 0.2%. Crude oil prices added about 25 cents per barrel, recovering a little from the sharper falls which came earlier on news of a US inventory build.
On the economic front the rest of the day will bring June’s monetary policy decision from the European Central Bank, with no change expected. US initial and continuing jobless-claims data will see daylight, as will the Bank of Canada’s Financial System Review.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.