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Bob Mason
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Earlier in the Day:

It was another quiet Asian session this morning, with Japan’s June retail sales figures the only stats to provide direction in the early hours.

Outside of the stats, the markets responded further to U.S 2nd quarter GDP numbers from Friday as the U.S – China trade talks resumed.

Sentiment towards Iran was also a factor, as Britain and the U.S look to ease tensions.

For the Japanese Yen

According to the Ministry of Economy, Trade, and Industry, retail sales rose by 0.5% in June, which came in ahead of a forecasted 0.2%. Sales had risen by 1.3% in May.

The Japanese Yen moved from ¥108.607 to ¥108.633 upon release of the figures. At the time of writing, the Japanese Yen was up by 0.11% to ¥108.56 against the U.S Dollar.

Elsewhere

At the time of writing, the Aussie Dollar was down by 0.07% to $0.6906, while the Kiwi Dollar was down by 0.11% to $0.6629.

In the Asian equity markets, it was a mixed bag for the majors. The Hang Seng led the way down, falling by 1.43%. The Nikkei and CSI300 also saw red, with falls of 0.43% and 0.18% respectively as trade talks resume. Bucking the trend was the ASX200, which rose by 0.5%.

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The Day Ahead:

For the EUR

It’s a quiet day ahead for the EUR, with Spain’s prelim July inflation numbers due out later this morning. With the ECB focused on consumption and labor market conditions to support the economy, inflation would need to materially accelerate to question the ECB’s dovish stance on monetary policy.

On the geopolitical front, sentiment towards trade talks between the U.S and China and updates from Iran will also influence.

At the time of writing, the EUR was down by 0.01% to $1.1126.

For the Pound

Economic data is limited to house price figures due out later this morning that will unlikely to have an impact on the Pound.

With the stats on the lighter side, Brexit chatter, updates from the U.S – China trade talks and Iran will be of influence.

Boris Johnson had told Merkel and Macron that Brexit talks are on hold until the backstop requirement has been removed. While Johnson’s comments will have ruffled the EU’s feathers, the more hardline, Trump-like approach would certainly garner some support. Members of the Tory party in favor of remaining in the EU would have felt bruised, however. But, as Theresa May has learned, it is almost impossible to appease both sides of the Brexit camp… For the Pound, Johnson’s stance on the backstop is negative.

We would expect risk aversion to also be negative for the Pound on the day.

At the time of writing, the Pound was down by 0.15% to $1.2366.

Across the Pond

There are no material stats due out later today to provide the Greenback with direction. A lack of stats will leave the Dollar in the hands of the U.S – China trade talks that resume this week.

Following better than expected stats last week and a pickup in the Greenback, rising tensions in the Middle East would also be a boost for the Dollar.

At the time of writing, the Dollar Spot Index was down by 0.01% to 98.00.

For the Loonie

It’s a quiet start to the week, with no material stats due out of Canada until Wednesday. The lack of stats continues to leave the Loonie in the hands of crude oil prices and market risk sentiment.

The Loonie was down by 0.08% at C$1.3176, against the U.S Dollar, at the time of writing.

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