Much of the hope focuses on Japan which has an election later in the week that though considered a minor one could take on greater impact given that Abenomic has not revived the Japanese economy and investors are restive. Hope as they say springs eternal and the U.S. is not immune where it looks as if following the Brexit saga the Fed will be forced to hold its fire on interest rates until they do what they do best, wait to read more tea leaves. Such would damped any upswing in the U.S. dollar. We like the idea of a surprise rise in agricultural commodities going forward that nearly everyone seems to be ignoring given the weaker dollar.
The Nikkei 225 was up 0.4%, the Kospi edged ahead 0.2%, the Hang Send Index gains 1.8% and the Shanghai Composite matched the Hang Send rising 1.8%. Meanwhile, much of the focus shifted to Australia where the dollar there faded early only to recover later and concerns about control over Parliament suggest a possible paralysis in policy. Reuters reported, the Australian dollar was slightly higher at $0.7495 AUD=D4, off session lows but still below Friday's one-week high of $0.7504.
The British pound edged up 0.1 percent to $1.3289 GBP=D4, nursing its losses after its 11 percent plunge to a 31-year trough of $1.3122 a week ago following last month's Brexit stunner.
The U.S. dollar took a breather ahead of the holiday, with the dollar index steady at 95.630 .DXY, but it remained pressured by a fall in U.S. Treasury yields on Friday that saw the benchmark 10-year US10YT=RR yield briefly touch a four-year nadir.
After gaining nearly 9% in June, gold rallied further overnight, up 0.5% at $1,349.20 an ounce partly on the post-Brexit news and partly over just plain uncertainty. A weaker dollar should help gold as the Fed appeared to be stalemated once again about interest rates. Silver also enjoyed a good month of June, breaking $20 an ounce for the first time in two years. Silver last traded at $20.43.
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