USD/JPY pair enjoyed good two-way businesses in Asia this Monday, as the Yen caught a fresh bid-wave amid mounting US recession fears and the resulting risk-off slide in the Asian equities. However, the spot managed to attempt a corrective bounce from 6-week lows of 109.72 and reverted to the 110 handle, as the dovish comments by the Chicago Fed President Evans were offset by the recent speech by the BOJ Governor Kuroda.
Both the European currencies, the EUR and the GBP, remained under pressure amid a lack of clarity on the Brexit issue that is likely to keep the investors on the edge this week.
Today’s EUR macro calendar is a thin showing as we head into a fresh week, but the Brexit-related developments and central bankers’ speeches will continue to drive the sentiment across the market. On the data front, the German IFO business survey will drop in at 09:00 GMT and that’s the only relevant release, as the UK docket remains data-empty.
The NA session also limited macro news, except for the second-tier releases in the Chicago Fed national activity index and Dallas Fed manufacturing business index, slated for release at 12:30 GMT and 14:30 GMT respectively.
Oil trades near $58.70 during early sessions on Monday. In spite of witnessing consecutive declines in crude stocks and rig counts, doubts over the global economic health continue to weigh on energy prices. Developments surrounding a trade deal between the US and China can offer an immediate catalyst to prices.
Gold prices gained on Monday as recession fear sparked safe-haven demand. Friday’s sluggish print of the US Markit purchasing manager index (PMI) dragged the 10-year treasury yields beneath 3-month bill for the first time since 2007. Pessimists considered it as another signal favouring that the US economy will again slide into recession. Traders may now look forward to speeches by the Fed policymakers, namely the Presidents of the Federal Reserve Bank of Chicago and Philadelphia respectively, in order to confirm further bearish bias of the US central bank.