Japanese Yen Drops, Start of Brexit Negotiations Improves The Pound

Japanese Yen remains soft. Disappointing trade balance data lowered the currency even further. Kiwi, on the other hand, maintains its strength. The Pound has slightly improved due to beginning of Brexit negotiations. EU and UK will finally settle the whole process of leaving. David Davis (Britain’s Brexit Secretary) claimed that this will be a historical and exceptional moment. He and Michel Barnier will be meeting for one week every month. The negotiations are expected to last up to October 2018. Yellow metal is in diapason between 1250/60. WTI crude oil is also tightened in diapason under 45 handle.

Philip Lowe (RBA Governor) stated that Australian economic growth will improve during the next couple of years. He said that RBA’s policy matches current stance of the economy. Business conditions and employment growth are both satisfying. Wage growth is weak. Households debt increased. Lowe noted that these problems should be closely examined and solved. Jens Weidmann, William Dudley and Charles Evans will also give their speeches today.

Reserve Bank of New Zealand is about to declare its rate. The official cash rate will probably remain at 1.75%. Reserve Bank of Australia and Bank of Japan will publish protocols of their meetings. European Central Bank will announce its monthly economic bulletin. Later this week, Canada will publish retail sales and Consumer Price Index. Eurozone will show PMIs. Japanese trade surplus reduced to 0.13% yen in prior month. Export growth indicated 0.0% mom. Year on year, exports rose 14.9%, the 2-year maximum. Imports lifted 0.3% mom and 17.8% yoy. Nikkei is over 20000 handle and today it increased 0.6%. Hong Kong HSI lifted 0.95%. China SSE composite surged 0.66%.