The Japanese Yen outperformed as stocks declined in Asian trade, boosting the standby anti-risk currency. The sentiment-linked Australian and New Zealand Dollars duly tracked lower. Energy names appeared to lead the selloff, which the news-wires linked to yesterday’s sharp drop in crude oil prices.
Looking ahead, a dull offering of European and US economic data may allow for risk appetite trends to remain at the forefront. Futures tracking the benchmark S&P 500 index are pointing lower, hinting that overnight trends may carry forward amid continued risk aversion.
The re-opening of the UK Parliament will be marked by the unveiling of the new government’s legislative agenda. This will be aimed to show how the now-minority Conservative government of Prime Minister Theresa May and its allies at the DUP intend to proceed with Brexit.
The two parties agree on relatively little save for the need to enforce the outcome of last year’s EU membership referendum. For its part, the DUP favors a “softer†divorce but takes a harder line on social issues. The Tories are less conciliatory on the former but more easy-going on the latter.
How these divisions will shape governance in the months ahead will help define investors’ appraisal of GBP-denominated assets. An agenda that compromises away key aspects of either group’s core philosophy may be seen as in inherently unstable, sending the British Pound lower.
Asia Session
European Session
** All times listed in GMT. See the full DailyFX economic calendar here.
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