Geopolitical Risk to Drive the Majors as Tension in the Gulf Builds

A particularly light economic calendar leaves geopolitical risk in focus. Iran, Brexit, and trade are just a number of things the markets need to consider…
Bob Mason
Light Board

Earlier in the Day:

It’s a particularly quiet start to the week, with no material stats released through the Asian session to provide direction early on.

A lack of stats left the majors on the defensive as the markets look to assess what reaction the West will have to Iran’s latest moves in the Gulf.

For the Asian Majors

At the time of writing, the Japanese Yen was down by 0.24% to ¥107.97 against the U.S Dollar. The Kiwi Dollar was down by 0.21% to $0.6778, while the Aussie Dollar was flat at $0.7042.

In the Asian equity markets, the majors struggled early on. The Hang Seng led the way down, falling by 0.77% at the time of writing.  Also seeing red was the Nikkei and ASX300, which were down by 0.33% and by 0.39% respectively. The CSI300, however, was down by just 0.02%.

Market jitters over rising tension in the Gulf weighed early on, though the Japanese Yen failed to benefit, as the markets begin to price in further policy easing from the BoJ.

The Day Ahead:

For the EUR

It’s also a quiet start to the week, with no material stats due out of the Eurozone. A lack of stats will leave geopolitical risk to provide direction on the day.

Rising tension in the Middle East would be considered negative for the EUR.

At the time of writing, the EUR was down by 0.04% to $1.1217.

For the Pound

It’s a relatively quiet day on the economic calendar. The UK’s CBI Industrial Trend Order figures are due out this afternoon.

While the Pound tends to respond to the monthly numbers, the focus on the day will be on the Parliament.

After a month-long leadership race, the markets will learn who will become the next British Prime Minister this week.

Brexit chatter will be on a high, though it’s unlikely to materially affect the outcome as postal ballots have likely made their way to be counted.

At the time of writing, the Pound was down by 0.01% to $1.2501.

Across the Pond

There are no material stats due out later this afternoon to provide the Greenback with direction. The lack of stats leaves the markets to focus on chatter from the Oval Office through the day.

In addition to rising tension in the Middle East, there’s China and the FED to consider. Trump may well begin the week attempting to push the FED to deliver a market-friendly rate cut in a weeks time.

At the time of writing, the Dollar Spot Index was up by 0.03% to 97.180.

For the Loonie

It’s a relatively quiet day ahead, with key stats due out of Canada later today limited to May wholesale sales figures.

Following last week’s disappointing inflation and retail sales figures, the numbers will need to be impressive to give the Loonie a boost.

Outside of the numbers, oil prices will influence. Any escalation in the Middle East could lead to an oil price spike that would be Loonie positive.

The Loonie was down 0.02% at C$1.3062, against the U.S Dollar, at the time of writing.

Don't miss a thing!

Discover what's moving the markets. Sign up for a daily update delivered to your inbox

Latest Articles

See All

Expand Your Knowledge

See All
IMPORTANT DISCLAIMERS
The content provided on the website includes general news and publications, our personal analysis and opinions, and contents provided by third parties, which are intended for educational and research purposes only. It does not constitute, and should not be read as, any recommendation or advice to take any action whatsoever, including to make any investment or buy any product. When making any financial decision, you should perform your own due diligence checks, apply your own discretion and consult your competent advisors. The content of the website is not personally directed to you, and we does not take into account your financial situation or needs.The information contained in this website is not necessarily provided in real-time nor is it necessarily accurate. Prices provided herein may be provided by market makers and not by exchanges.Any trading or other financial decision you make shall be at your full responsibility, and you must not rely on any information provided through the website. FX Empire does not provide any warranty regarding any of the information contained in the website, and shall bear no responsibility for any trading losses you might incur as a result of using any information contained in the website.The website may include advertisements and other promotional contents, and FX Empire may receive compensation from third parties in connection with the content. FX Empire does not endorse any third party or recommends using any third party's services, and does not assume responsibility for your use of any such third party's website or services.FX Empire and its employees, officers, subsidiaries and associates, are not liable nor shall they be held liable for any loss or damage resulting from your use of the website or reliance on the information provided on this website.
RISK DISCLAIMER
This website includes information about cryptocurrencies, contracts for difference (CFDs) and other financial instruments, and about brokers, exchanges and other entities trading in such instruments. Both cryptocurrencies and CFDs are complex instruments and come with a high risk of losing money. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.FX Empire encourages you to perform your own research before making any investment decision, and to avoid investing in any financial instrument which you do not fully understand how it works and what are the risks involved.
FOLLOW US