Asia Pacific Market Open – Trade War Fears, Euro, Italian Budget, USD/JPY, Nikkei 225
- Anti-risk Japanese Yen[1] gained ground as market remained in a sour mood as anticipated
- Euro[2] fell on Italy budget concerns, AUD[3] & NZD[4] recover amidst S&P 500[5] paring losses
- USD/JPY[6] prices descend under key rising support, eyeing trend line from March 2016 next
See our study on the history of trade wars[7] to learn how it might influence financial markets!
The anti-risk Japanese Yen gained broadly against its major counterparts to start the beginning of this week as expected[8], boosted amidst further declines in global benchmark stock indexes. Losses picked up pace as European markets came online and Italian 10-year government bond yields soared to their highest since 2014.
Concerns seemed to have stemmed from Italy as EU Commissioners noted a ‘significant deviation’ of budget targets, referencing the 2.4% deficit proposed by the anti-establishment parties. The DAX[9] and Euro Stoxx 50 finished the day 1.36% and 1.07% lower. This also boded ill for the Euro which underperformed after a couple of days of correction.
While Wall Street edged cautiously lower, the S&P 500 fell only about 0.04%, there was a recovery in stocks towards the latter half of the day. This allowed pro-risk currencies such as the Australian and New Zealand Dollars to end the session on an upbeat. Banks and consumer staples helped to compensate for declines in tech shares.
Rising trade war tensions between China and the
