Asian markets ended today’s session broadly higher, unfazed by the events that took place in Turkey over the weekend. The absence of economic data and the trading holiday in Japan provided little direction to the markets in general.
Global markets mixed
Taiwan TSEC 50 Index finished the day 0.65% higher at 9,008.21 while Hang Seng (INDEXHANGSENG:HSI) rose 0.66% to 21,803.18. Unlike Asian counterparts, European markets opened in the red, reflecting perceptions of Turkey’s developments. Meanwhile, reports making rounds about the possible recession in the UK has also added to negative sentiment. CAC 40 (INDEXEURO:PX1) erased 0.21% of gains to 4,363.17 while DAX (INDEXDB:DAX) has fallen 0.27% to 10,040.08 during the opening hours.
BoE might not cut rates in August
The Bank of England’s Martin Weale gave a reason for the pound sterling to march higher after he indicated that interest rate cuts may not happen during the bank’s August meeting. Weale added that he would wait for more evidence to show the true impact of the Brexit on the economy, which will help in forming a policy stance. Weale’s statement helped GBP/USD (GBPUSD) to add 0.41% to 1.3235. The euro also maintained its pace against U.S. Dollar (CURRENCY:USD) with EUR/USD (EURUSD) advancing 0.14% to 1.1043. Demand for safe haven asset yen faded further as USD/JPY (USDJPY) dipped 0.72% to 105.64.
In other asset classes, oil has underperformed during the day so far. Brent Crude shook off 0.19% of its gains to $47.52 and West Texas Intermediate Crude Oil slipped 0.28% to $45.82. The decline in crude prices continued despite a fall in Libyan crude exports and positive U.S. data released last week. Outlook for the commodity turned weak after Morgan Stanley expressed doubts over the long-term trajectory of oil. It said that demand for petrochemicals and non-petroleum products is adding to demand, but are not helpful in influencing crude oil supplies directly.