Yen and Dollar open the week higher while European majors and commodity currencies are pressured as post-Brexit referendum moves continue. Nonetheless, major pairs are held from Friday's spikes for the moment. Asian stock markets are mixed with Nikkei recovering over 200 pts while Hong Kong HSI is down -200 pts. While EU leaders were united in urging UK to start the exit process as soon as possible, the messages from UK are different. Pro Brexit leader Boris Johnson wrote in the Daily Telegraph saying that there was "no great rush" to leave EU and there will "continue to be free trade, and access to the single market".
Markets focus will stay on the aftermath of Brexit referendum this week. German Chancellor Angela Merkel will meet with Italian prime minister Matteo Renzi, French president Francois Hollande and president of European council Donald Tusk today. The 28 commissioners are also due to meet on Monday in Brussels, with a two day summit of national leaders on Tuesday and Wednesday. Meanwhile, there could be more actions from rating agencies this week after Moody's downgraded the outlook for the Aa1 British government debt from "stable" to "negative".
Meanwhile, there are already talks of the ways that could eventually avoid a Brexit in spite of the result of last week's referendum. Firstly, since the referendum is not binding, the UK parliament can actually vote against it. Secondly, there are already 3 million Britons signing a petition to re-do the referendum. Thirdly, there are talks that the Scottish and Northern Irish parliament could veto the decision of exiting EU. But in any case, the drama will continue for a while at least.
Elsewhere, New Zealand trade surplus widened to NZD 358m in May. Eurozone M3 and US trade balance will be released later today. Looking ahead, Brexit related news will remain the major focus even though the calendar is packed with important data towards the end of the week. In particular, there are continuous speculation that BoJ will announce additional stimulus. And BoJ governor Haruhiko Kuroda should have met prime minister Shinzo Abe today. And, Japan will release inflation and quarterly Tankan survey on Friday. Here are some highlights for the week ahead:
- Tuesday: German Import price; US Q1 GDP final, S&P Case Shiller house price, consumer confidence
- Wednesday: Japan retail sales; Swiss UBS consumption indicator; German Gfk consumer sentiment, CPI; UK mortgage approvals; US personal income and spending, pending home sales
- Thursday: Japan industrial production, housing starts; German retail sales, unemployment; Swiss KOF; UK Q1 GDP final, current account; Eurozone CPI; Canada GDP, RMPI and IPPI; US jobless claims, Chicago PMI
- Friday: Japan CPI, Tankan, consumer confidence; China PMIs; Swiss retail sales; UK PMI manufacturing; Eurozone unemployment rate; US ISM manufacturing, construction spending.