A steady start to the week

Hong Kong shares pressured

It was a quiet session in Asia to open the week with equities performing better than other asset classes. Most indices countered Friday’s losses on Friday, eking out small gains without any particular motive driving sentiment. US indices rose between 0.20% and 0.25% but Hong Kong stocks under-performed following more weekend anti-government protests which turned violent again. The HK33 index slumped 0.75% to 28,540.

On the currency side, the yen was slightly better offered, falling 0.2% vs the US dollar and 0.07% versus the Australian dollar. The pound was steady versus the greenback as markets await the result of the Conservative Party leadership race, which will probably be known tomorrow.

GBP/USD Daily Chart

Source: OANDA fxTrade

Raising the debt ceiling

The US press is reporting that the Trump Administration and legislators are close to reaching an agreement on US budget caps and the debt ceiling. The deal supposedly raises the debt ceiling for two years while spending limits would also be set for two years. It is believed that any spending cuts would be in the future and seen significantly below the $150 billion requested by the Trump Administration. Last Thursday, US Treasury Secretary Mnuchin said there could be cash issues as early as September if the debt ceiling was not raised.

Abe’s Victory, Hong Kong protests continue, Trade optimism brews and geopolitical risks drive oil and gold

Nothing to influence on the data calendar

Markets will be left to their own devices today, with hardly any key data points scheduled. From the UK we see the CBI industrial trends survey for July followed by the US Chicago Fed national activity index for June. Speeches from BOJ’s Kuroda and RBA’s Kent could be the major highlights.

The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/

OANDA Senior Market Analyst Craig Erlam previews the week’s business and market news with Jazz FM Business Breakfast presenter Jonny Hart. They discuss the next UK Prime Minister, Brexit, Bitcoin, Libra, Facebook, Amazon, Boeing, Deutsche Bank and the ECB interest rate decision.

Source: MarketPulse

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