Asia struggles for direction
It’s been quiet on the US-China trade war front since last week’s bilateral meeting ended without a concrete result and currency markets in Asia struggled to find direction on this lack of inputs. The data slate was also barren, and equity markets were barely able to match the record-topping performance on Wall Street. The Nikkei225 gained 0.5%, as did the Hang Seng, while China shares eased off 0.3%. USD/CNH rose for a second day, adding 0.1% to 6.8087, despite a relatively steady fixing.
Brexit deadline pushed bank to November
The financial press in the US focused on comments from EU and UK officials who said that any Brexit progress by October would likely not be possible, and a new deadline of mid-November was now the focus. GBP/USD showed little reaction to the headline, though remained in the red on the day. The pair is currently trading at 1.2866 with the 55-day moving average at 1.3060 still capping the upside, as it has done since April 23.
NAFTA negotiations in full swing
Canada’s top trade negotiator re-joined NAFTA talks, praising Mexico’s concessions on cars and labour rights. Chystia Freeland said the concessions would pave the way for productive talks this week as all three countries race toward a Friday deadline for a deal to update the North American Free Trade Agreement. Separately, Canadian newspapers were reporting that Canada is prepared to offer concessions related to dairy products as part of the negotiations. USD/CAD is down 0.15% in Asia at 1.2910
US Q2 GDP to be revised lower
The highlight of today’s data calendar will no doubt be the second reading of US Q2 GDP. Latest surveys suggests economists are anticipating a slight downward revision to 4.0% from 4.1% and a greater downward revision should have negative connotations for the US dollar. The personal consumption expenditure prices index, the Fed’s favoured monitor for inflation, is expected to remain static in Q2 at 1.8%.
The full MarketPulse data calendar is available here: https://www.marketpulse.com/economic-events/
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