The Yen outperformed in Asian trade as most regional stock exchanges suffered, boosting the perennially anti-risk Japanese currency. Energy and raw materials shares plunged in a move that probably echoed yesterday’s dramatic drop in crude oil prices. That seemed to reflect profit-taking after the extension of an OPEC-led output cut scheme offered nothing that was not already priced in.
The British Pound fell after a YouGov poll – the first since the terrorist attack in Manchester – showed ebbing support for the ruling Conservative party. The Tories’ lead shrank to 5 percent, the smallest since mid-July 2016 when Prime Minister Theresa May just took the reins after the Brexit referendum. The specter of uncertainty a mere two weeks before an election sent capital fleeing from GBP-denominated assets.
The absence of top-tier European economic data will put the spotlight on a meeting of G7 leaders in Taormina, Sicily. Disagreement about international trade norms is likely to be of greatest interest to investors. US President Trump is a vocal free trade skeptic, putting him at odds with his counterparts. Signs of growing tension may dent risk appetite, compounding Yen gains.
A revised set of first-quarter US GDP figures then comes in focus. The annualized growth rate is expected to be upgraded to 0.9 percent from the initially reported 0.7 percent. A steady string of disappointing US news-flow over the past two months opens the door for a disappointment that may cool Fed rate hike speculation, weighing on the US Dollar.
Asia Session
European Session
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