Be mindful of the pound's movement as negotiations between the UK and the EU resume! “June 2 Highlights and Event Schedule”

Yesterday, amid concerns that discrimination protests spread to many countries starting with the United States could lead to a risk-off environment, commodity currencies—particularly the Oceania currencies—were bought, while safe-haven currencies such as the yen and the franc were sold, creating a risk-on market.

While concerns about Hong Kong persist among nations and discrimination protests spread, the stock market is performing well and the Nikkei average has surpassed 22,000.

China's Caixin manufacturing PMI exceeded expectations, rising above the critical dividing line of 50 between good and bad conditions, which also supported the rise in Oceania currencies.

◎ Today's Highlights

1) RBA Board Meeting

Attention on Australia’s economic outlook amid sanctions from China affecting trade.

Also, look for the post-meeting statement regarding the outlook for reopening the economy and recovery from COVID-19.

No changes to monetary policy are expected.

2) UK-EU Brexit Trade Negotiations

Brexit negotiations and the trade agreement between the UK and the EU have not progressed at all.

Negotiations resume today, and observers will watch how far talks advance.

Additionally, it remains unclear how far progress will go in these negotiations, but a decision must also be made on whether to extend the negotiation period.

The UK is firmly opposed to extending the negotiations, but it remains to be seen whether talks will conclude within the year.

3) Risk-off Factors

With the enactment of the Hong Kong National Security Law, there have been sanctions, restrictions, and sanctions imposed on Hong Kong and China.

China retaliates by hinting at breaking the first phase of the U.S.-China agreement. If U.S.-China relations worsen, risk-off conditions may emerge, so pay attention to headlines.

Also, protests against racial discrimination in the United States have spread to many countries, including the UK and Australia.

Some rumors suggest that China’s influence may underlie these discrimination protests.

If that is the case, and countries continue sanctions against China over the National Security Law, discrimination protests may continue as well.

◎ Today's Event Schedule

Tuesday, June 2

UK-EU (Brexit) Trade Negotiations

13:30　AUDRBA Board: Policy Rate and Statement Release

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