The deficiency of top tier data has caused most currencies to remain little changed since the market closed on Friday, with exception to all Aussie related pairs. The Australian Federal election was held this weekend and presently the vote counting continues, however all estimates point to something which hasn’t occurred since World War II; a hung parliament. Neither Australian Prime Minister Julia Gillard (Labor Party) nor opposition leader Tony Abbott (Liberal/National Party) gained an outright majority -meaning one side must win a minimum of 76 seats in the House of Representatives - causing the AUD/USD to gap lower over the weekend from 0.8935/40 on Friday to 0.8855/60 (as noted in the week ahead). Additionally, the AUD/JPY dropped from 76.50 to 75.80 and AUD/NZD gapped from 1.2645 to 1.2560. However, the negative impact on the AUD could be relatively short-lived once either party establishes a coalition government (especially if it’s the Liberal/National Party who pledged to repeal the Minerals Resource Tax).

Japanese government spokesman Sengoku said that Prime Minister Kan and BOJ Chief Shirakawa spoke today for about 15 minutes over the phone, after their highly anticipated meeting last week was postponed, and have agreed to closely cooperate with one another. Their conversation included talk about the Japanese economy and the Yen; however the topic of intervention was not discussed. Additionally, Sengoku declined to comment on the potential of BOJ easing in the future. The Yen strengthened a little on the back of these comments, seeing USD/JPY trade from 85.45 towards 85.35 & EUR/JPY fall from 108.65/70 to 108.45, and the Nikkei 225 went from 9150 to 9095.

On the data front out of Europe we have French, German and Euro-zone August Services and Manufacturing PMI numbers, as well as Euro-zone August Composite PMI.