Asian traders on edge ahead of key global events

Agency/  Traders trod water in Asia on Wednesday as they nervously await a string of major events that could either hammer global markets or fuel a rally.
Thursday sees Britain voting in a general election, the European Central Bank’s policy meeting and — potentially the biggest market-mover — sacked FBI boss James Comey testifying to Congress on President Donald Trump’s possible campaign links to Russia. Adding to the sense of unease is a brewing crisis in the Middle East, where Saudi Arabia, the UAE and Egypt cut off ties and transport links to Qatar — citing its alleged support for extremism.
There are fears the dispute could turn into a wider conflict involving Qatar ally Iran, with Trump wading into the row in a series of tweets signalling support for Riyadh on the issue.
After a recent rally trading floors have quietened as dealers take a wait-and-see attitude, lifting safe-haven assets such as the yen and gold.”There seems to be a little bit of nervousness in the market over Comey’s testimony,” Greg McKenna, chief market strategist at AxiTrader, said in a note.
“Whether it is geopolitics and the Middle East, worries about James Comey’s testimony, the ECB or UK election, traders backed off a little overnight.
“The yen rose to 109.37 against the dollar, more than 1.5 percent stronger than last week, while gold was hovering around seven-month highs. The two are considered safe bets in times of uncertainty.
– Shanghai jumps –
On equity markets Tokyo’s Nikkei ended flat, while Seoul and Wellington each slipped 0.4 percent.Hong Kong fell 0.1 percent and Sydney was barely moved following data showing Australia’s economic growth slowed sharply in the first quarter.
But Shanghai jumped 1.2 percent as traders welcomed a further strengthening of the yuan, which has jumped more than three percent since the start of the year, when it had been wallowing around eight-year lows. Singapore, Manila and Jakarta were slightly higher.
On currency markets the pound edged up against the dollar ahead of the British vote.Sterling has come under pressure in the past few weeks as Prime Minister Theresa May’s ruling Conservatives have seen their once-commanding lead almost wiped out by Jeremy Corbyn’s opposition Labour Party, raising worries about uncertainty just weeks ahead of Brexit negotiations.
The euro also remains in good health following a string of positive indicators out of the eurozone, led by Germany, and expectations the ECB will start to tighten monetary policy soon — possibly Thursday.In early European trade London and Paris each dipped 0.1 percent while Frankfurt slipped 0.2 percent.


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