Wall Street saw all three major indices close slightly in the red after lackluster trading. The sentiment was echoed in the Asian session, where the ASX 200 lost 1.3%, the Nikkei lost 0.6% as the exporting sectors were dragged lower by a firmer Yen. Meantime in China, the Shanghai comp. lost 0.2% while the Hang Seng managed a sneaky 0.3% gain to buck the global trend.
In FX, the JPY is the pair to watch as it continues to be preferred as the safe haven currency of choice as we see global uncertainty rising. The USDJPY has broken below the 200 Daily Moving Average and we are seeing strong selling pressure which is likely to continue as uncertainty grows. The GBP is resilient given the weekend`s events and the upcoming general election taking place on the 8th of June. The GBP will remain sensitive to polling data, with a conservative lead likely to keep the GBP bid, while a turn in favor of the labor party will see the GBP weaken.
In Commodities, gold continues to be driven higher as we see the 1290 resistance level under fire with strong buying pressure coming through as the precious metal`s safe haven characteristics play up. With uncertainty growing it is likely that we will see the 1300 handle and beyond being tested. However, if sentiment shifts, sellers will make a b-line for the 1250 support area as positons are unwound.
Crude oil remains subdued, below the $50 mark as markets remain unconvinced of supply cut promises and begin to fear a decrease in demand as global uncertainty begins is on the front foot. Any news which has markets expecting a shock to supply and or demand will see the commodities price fluctuate.
Looking ahead we have key data out of the US and Canada which will likely cause some volatility.