MARKET
On Monday , Asian shares slipped as investors wagered on a less aggressive policy easing in the United States, while the Turkish lira held near two-week lows after the country’s president dismissed its central bank governor over the weekend.
Asian shares tracked Wall Street, which fell from record highs on Friday.
U.S. labor report that showed nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000, in a sign the world’s largest economy still had fire.
U.S. Treasuries sold off, sending yields on two-year notes about 10 basis points higher.
Expectations for a Fed rate cut also narrowed with the market now pricing a 27 basis points easing this month, from 33 basis points prior to payrolls.
Fed Chairman Jerome Powell is expected to provide further cues on the near-term outlook for monetary policy this week at his semi-annual testimony to the U.S. Congress on the economy.
The Fed in its semi-annual report to Congress on Friday repeated its pledge to “act as appropriate” to sustain economic growth.
President Tayyip Erdogan sacked Cetinkaya for refusing the government’s repeated demands for rate cuts, raising questions about central bank independence.
Geopolitics may be in focus this week following news on Sunday that Iran will boost its uranium enrichment, in breach of a cap set by a landmark 2015 nuclear deal.
White House Economic advisor Larry Kudlow confirmed top representatives from the United States and China will meet in the coming week to continue trade talks.
FOREX
Turkish lira which weakened to 5.8245 per dollar, the lowest since June 25 after Turkey’s central bank governor Murat Cetinkaya, whose four-year term was due to run until 2020, was replaced by his deputy Murat Uysal. The lira pared some of its losses to last hold near 5.7401.
The dollar index eased from a 2-1/2 week top of 97.443 to last quote at 97.251.
The euro was flat at $1.1222, not far from a 2-1/2-week low of $1.1205 touched on Friday.
The Australian dollar which has been on an uptrend since June 18, slipped below 70 U.S. cents to last trade at $0.6974.
COMMODITY
oil prices rose with Brent crude futures LCOc1, the international benchmark for oil prices, up 9 cents at $64.32 per barrel while U.S. crude added 8 cents to $57.59.
Spot gold fell 0.2% to $1,397.03 an ounce.
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