Cautious trading sentiment highlighted the start of a fresh week this Monday, as the Hong Kong violence added the looming US-China trade deal anxiety and triggered a flight to safety across the board. Therefore, the safe-havens such as the Yen and Gold traded on the front foot while the risk assets in oil and Asian equities suffered.
Despite the risk-off action, the US Treasury yields managed to recover some ground after last week’s slump. Across the major pairs, USD/JPY retraced from five-month tops and retests 109.00 amid risk-aversion, while EUR/USD remains close to three-week lows of 1.1017. GBP/USD consolidates the early gains below 1.2800, hurt by Moody’s outlook downgrade.
Monday’s EUR calendar offers a flurry of economic releases from the UK docket, all dropping in at once at 09:30 GMT, including the monthly and quarterly GDP figures, Industrial Production, Trade Balance and Business Investment. Meanwhile, there is nothing of relevance from the Eurozone.
Nothing of note in the NA docket therefore the focus will remain on the US-China trade related developments amid a speech by the Fed official Rosengren, scheduled at 13:15 GMT.
Oil prices are off the highs as Saudi Aramco is set to begin its Initial Public Offering (IPO). Iran announced that it discovered a massive oilfield with reserves of 53 billion barrels, yet sanctions may prevent the field’s development.
Gold prices were little changed on Monday as markets largely shrugged off fresh violence in Hong Kong and uncertainty surround the U.S.-China trade negotiations.