Asian stock markets are set to open on the back foot today as uncertainly ahead of the weekend’s G7 meeting led to a downturn in risk appetite throughout the US session where the treasuries rallied and stocks pulled back after a couple of strong days. The Dow managed to finish the day up 0.38% but the damage was done across in the tech sector with the Nasdaq ending the session down 0.7%. Risk trades were lower across the board in the currency markets as Jpy and Chf appreciated against the greenback and on the crosses. We saw more volatility in the EM’s with the Brazilian real still under intense pressure and the Turkish Lira having a good relief rally after a surprise hike from the central bank.
The commodity currencies also drifted off after recent strong runs with the Aussie dollar off 60 pips after a good data week and the CAD and NZD also taking similar down turns.
Looking ahead to today’s trading and we will continue to see a focus on the crucial G7 meeting in Quebec, many calling it a G6+1 with the US finding it very hard to make friends on the trade front as the Trump administration pushes its protectionist policies. Investors will be monitoring developments closely and any surprise outcomes during the weekend could lead to some gapping issues on the Monday opens.
In terms of fundamental data releases, it’s a relatively quiet day ahead, the main focus in Asia will be the Chinese Trade Balance numbers and the only other tier 1 numbers to trouble the scorers will be the Canadian employment numbers.
Have a great weekend