Asian gains subdued after last week's rebound

Asian markets were mixed overnight slowing last week’s rebound as moves to the upside were limited. Chinese mainland stocks managed to lead the stunted charge higher with both the Shanghai Composite and CSI 300 adding half a percentage point each. In contrast H-shares closed 0.6% lower with construction companies selling off sharply on weaker housing data. Data released by the NBS earlier today indicated property prices in July for existing residential apartments fell in 65 out of 70 Chinese cities, while new home prices fell by an average 0.9% m/m in July.

Demand for the yen saw the currency strengthen towards 102.15 against the dollar in early trade as tensions surrounding Ukraine flared. Reports of Ukrainian forces attacking a Russian armoured convoy saw demand for the dollar against the yen rally for five straight sessions before a marginal correction towards the end of last week. With market participants watching risk conditions closely and US investors cautious ahead of the meeting of central bankers at Jackson Hole later on this week, we could see further yen strength against the dollar.

Spot gold prices remained under pressure throughout the Asian session after closing lower towards the 50 day MA on Friday as signs of improvement in the US economy boosted investor confidence in equity markets. The yellow metal has traded sideways for the past six weeks with activity earlier this morning seeing weakness below $1,300/oz, testing support at the 100 day moving average. Prices may resume moves on the upside on any flaring in geopolitical tensions but for now we expect gold to remain rangebound ahead of the meeting of central bankers in Jackson Hole, Wyoming on the 22^nd.

JPY strengthens against the dollar 

Spot gold prices pull back towards $1,300/oz

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