Geopolitical Overhang

SINGAPORE (Reuters) – Asian shares dipped on Monday following a lackluster end to last week globally on some earnings disappointments, while the dollar edged up but remained capped by U.S. political uncertainty.

Investors stuck to perceived havens such as the Japanese yen and gold after North Korea conducted another missile test late on Friday that it said proved its ability to strike the U.S. mainland.

The U.S. responded by flying two bombers over the Korean peninsula on Sunday.

Markets were also awaiting China’s official factory and service sector activity surveys due out at 0100 GMT and a flurry of other data globally later in the week.

The safe-haven Japanese yen strengthened about 0.2 percent to 110.42 yen JPY= to the dollar. Gold XAU= hit a 6 1/2-week high early on Monday and was trading just a whisker below that level at $1,269.86 an ounce.

“The geopolitical overhang will likely keep top side moves in check early in the week as the disorganized U.S. and China policy towards North Korea is not helping matters,” Stephen Innes, head of Asia-Pacific trading at OANDA, wrote in a note.


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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes