The central bankers’ speeches and economic releases played a second fiddle to the risk-off market condition that dominated the Asian trades this Wednesday, after the US Chief Economic Adviser Gary Cohn, a proponent of free-market trade, announced his resignation overnight. Cohn’s departure re-ignited worries over Trump’s protectionism and potential trade war, which in turn fuelled risk-off sentiment across the financial markets in Asia.
Among the Asia-pac currencies, the Yen was the biggest beneficiary of the risk-aversion while the Aussie faced a double-whammy on the back of the Australian Q4 GDP miss and reduced appetite for higher-yielding assets. The Kiwi too followed suit amid tumbling Asian stocks and oil prices. Meanwhile, the US dollar remained broadly on the back foot on protectionism fears while investors digest the speeches by the FOMC members Brainard and Kaplan.
Main topics in Asia
Aussie GDP Q4 2017 misses expectations
Australian GDP data has missed expectations and disappointed 0.4% Q/Q vs 0.6% expected and prior 0.6%. For the year, the data arrived at 2.4% vs 2.5% expected and prior 2.8 %.
RBA's Lowe: would be helpful to have lower AUD/USD
After hawkish comments from Philip Lowe, who is the Reserve Bank of Australia's Governor, speaking at the Australian Financial Review Business Summit in Sydney around the topic of "The Changing Nature of Investment" …
Whitehouse Gary Cohn is planning to resign, risk off markets back in play
Due to the opposition on tariffs on steel that Trump proposed last week, Whitehouse Gary Cohn is planning to resign.
Fed's Brainard: gradual US Rate hikes likely appropriate
Fed's Brainard has been crossing the wires with key comments …
Fed’s Kaplan: Base case is approximately 3 Fed rate hikes in 2018
More comments hitting the wires from the Dallas Fed President Kaplan, this time speaking on the Fed’s rate hike prospects for this year.
Fed’s Kaplan: It’s too soon to change forecast based on tariffs
BoJ Dep Gov Nominee Wakatabe: Risks associated to ending stimulus too soon
BOJ's Amamiya - inflation is moving towards the target
Key Focus ahead
There are no first-tier macro news on the cards from the Euroland today, and hence, attention turns towards the second-liner UK Halifax HPI and Eurozone revised GDP releases. Meanwhile, Fedspeaks (speeches by Fed’s Bostic and Dudley) will fill in the pre-US session alongside the release of the key US ADP jobs report.
In the NA session, the trade figures from both Canada and the US will be reported ahead of the main risk event for today – the BOC interest rate decision, which will have a major impact on the CAD. Also, of relevance remains the US EIA crude inventory report for further trading impetus on the oil-linked Loonie.
EUR/USD clocks two-week high, options regain bull bias
EUR/USD rose to 1.2429 in Asia - the highest level since Feb. 19 after Gary Cohn, advocate for free trade in the White House, announced his resignation boosting fears of a trade war.
GBP/USD looking to reclaim 1.39 handle in London session
The pair climbed steadily in Tuesday's trading as overall risk appetite took a swing upwards, and market sentiment looks set to continue to be the main driver for the GBP/USD with only low- and mid-tier data on the offering throughout the week.
Dollar Awaits US Jobs Data as Trade Uncertainty Remains
The ADP will mark the first release of February employment data in the US at 8:15 am EST on Wednesday, March 7. Strong gains are expected from private payrolls with the market looking ahead to the U.S. non-farm payrolls (NFP) on Friday.
Trump says will choose new chief economic advisor soon
"Will be making a decision soon on the appointment of new Chief Economic Advisor. Many people wanting the job - will choose wisely!"
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