Forex Today: Yen gains on oil-led risk-off, Queens’s Mansion speech eyed

Forex today witnessed yet another dull Asian session, with no major economic news reported, except for the BOJ minutes. Further, a cautious tone prevailed in the markets, as oil-price weakness induced risk-aversion extended into Asia, boosting the safe-haven bids for the yen at the expense of higher-yielding/ risk currencies such as the Antipodeans. Meanwhile, the US dollar took a pause after yesterday’s broad based rally, allowing cable and EUR/USD to breathe a sigh relief.

Among other news, MSCI included China A shares to its Emerging Market index, while political tensions between South Korea and North Korea continue to remain on the headlines. Also, the UK political drama continues, with the UK PM May having failed to reach a deal with the DUP.

Focus now shifts towards the Queen’s Mansion House speech, which could have a significant impact on the British currency. Besides, the UK public sector net borrowings data and BOE MPC member Haldane’s speech will fill in another wise light EUR calendar. Ahead of the US open, the SNB quarterly bulletin will be published, while the US existing home sales data, followed by the US EIA crude oil inventory report will be released in the NA session.

Main topics in Asia

BOJ Minutes: Inflation expectations remain weak

Minutes of the Bank of Japan (BOJ) policy meeting of April 26 released today show the policymakers expect the inflation expectations to remain weak.

DUP says “It can’t be taken for granted”, May’s deal falters

The Domestic Unionist Party (DUP) warned the UK Prime Minister Theresa May that “it can't be taken for granted” and criticized the lack of “negotiating experience” on the Conservative side.

Oil in bear market, headline CPIs to drop across the globe

Oil is down more than 20% from its yearly highs - a classic case of a bear market. WTI Oil closed yesterday at $43.33/barrel (yearly high is $55.21). Brent closed at $45.80/barrel (yearly high is $58.35). 

MSCI to include China in its benchmark EM equity index - Rabobank

In one of totally unsurprising surprises, early this morning MSCI Inc. took the decision to include China in its benchmark EM equity index at the fourth time of asking.

Republican Karen Handel wins Georgia House special election – CNN projects

Republican Karen Handel has beaten Democrat Jon Ossoff in Georgia's 6th District special election, the most expensive US House race on record, CNN projects.

Saudi royal decree replaces crown prince - RTRS

Reuters reports latest headlines from the Saudi Arabian state news agency, citing that the Saudi royal decree relieves Moahmmed Bin Nayef as crown prince, replaces him with Mohammed Bin Salman. 

Key Focus ahead

EUR/USD eyeing a test of 3-week lows near 1.1120?

The EUR/USD pair extends its Asian side-trend into early Europe, as investors await fresh fundamental catalysts for next near-term direction.

UK: Queen’s speech and PSNB in focus - TDS

For the second month of the fiscal year, markets are looking for UK’s PSNB ex-banks to come in at £6.8bn, compared to £7.0bn one year ago, explains the research team at TDS.

GBP/USD Forecast: turns vulnerable to slide further

“In absence of any major market moving economic releases from the UK, the EU's demand to discuss the Brexit bill before talking trade might continue to weigh on the British Pound and restrict any immediate swift recovery for the major,” Haresh Menghani, Analyst at FXStreet notes.