Originally published by CMC Markets
Political theatre could shape market trading as a summit between the leaders of the USA and North Korea begins in Singapore this morning. Economic impacts are unlikely but both leaders can surprise their own constituents and the globe. Conflicting signals from the weekend’s G7 summit were ignored in overnight trading, and the positive impulse will likely lift Asia Pacific markets on opening. Key market events this week could result in subdued trading volumes today.
Australian investors will play catch up after a holiday weekend. A lower Australian dollar may provide a further boost and see the main index beat overnight futures market gains of 27 points. Commodity exposed sectors could face resistance ahead of the USA’s scheduled introduction of tariffs later this week.
Trade concerns remain an important near term risk for markets. Despite a united final communique from the G7 leaders’ meeting the consensus was subject to a Twitter hosing. These conflicting signals may come back to bite investors, but in the short term are largely ignored as noise.
Events this week may wrestle the story away from politics. Retail sales and industrial production in China, inflation reads across Europe and the US and an almost certain interest rate hike from the Fed could draw attention. The swing factor may be the bank of Japan’s decision and statement on Friday. Analysts will examine both for any shift away from ongoing accommodation, with clear implications for the yen and the Nikkei.