A better sentiment towards the risk assets was witnessed in the Asian session this Wednesday, with the safe-havens such as the Yen, the CHF and gold sold-off across the board. The USD/JPY pair rebounded sharply towards 107.50 levels, tracking the rally in the Nikkei 225 index and firmer Treasury yields.
Meanwhile, the Antipodeans traded better offered in absence of the first-tier macro news from both the OZ economies. However, the downside was capped by positive oil prices and persisting risk-on market profile. Both, the EUR and GBP remained mildly bid ahead of the inflation data releases.
Main topics in Asia
Atlanta Fed's Bostic: US trade policy is confusing businesses
Head of the Atlanta Federal Reserve, Raphael Bostic, is speaking at a conference hosted by Bloomberg Tax in Atlanta.
Trump: US in "extremely high-level" talks with N.Korea - Reuters
As reported by Reuters, US President Donald Trump has announced that the US and North Korea have been talking directly, and are set to prepare a meeting between the two countries' leaders.
Japanese exports expand for 16th straight month
Japanese exports rose 2.1 percent in March - its 16th straight monthly rise, although the actual reading was well below the estimated figure of 4.7 percent.
CIA Director Pompeo met with North Korea's Kim Jong Un weeks ago - Washington Post
According to reporting by the Washington Post, two anonymous sources confirmed that Mike Pompeo, Director of the CIA, made a secret trip to North Korea over Easter weekend to establish a dialogue with the hermit country's leader.
IMF keeps global growth forecast unchanged, warns world growth will slow
In its latest World Economic Outlook report, the International Monetary Fund (IMF) maintained its forecasts for global growth this year but warned that the growth may continue to face a slowdown.
Nikkei 225, Hang Seng, Shanghai Composite all higher as equities continue Bull Run
The Nikkei has climbed over last month's high of 22,101.00 to trade into February's declines, and the Japanese index is up around 1.2 percent in early trading …
Hong Kong three-month HIBOR hits highest level this year - Reuters
The Hong Kong Interbank Offered Rate (HIBOR) or the interbank borrowing costs has jumped to 1.32071 - its highest level this year.
Key Focus ahead
Heading into Europe, all eyes remain on the UK annualized CPI reading due to be reported at 0830 GMT, which is expected to show that consumer prices remained flat at 2.7 percent in the month of March. Also, the UK PPI figures will be released alongside. Markets also look forward to the Eurozone final CPI estimate and construction output for a fresh momentum on the EUR trades.
The speeches by FOMC officials are expected to dominate the NA session amid a data-quiet US docket while the main event risk remains the Bank of Canada’s (BOC) monetary policy decision due to be announced at 1400 GMT, followed by Governor Poloz’s’ press conference at 1515 GMT. The Loonie will also take cues from the EIA weekly crude inventory report.
In the overnight trades, New Zealand’s inflation report will offer fresh trading impetus to the NZ traders.
EUR/USD fighting to stay upright, 1.24 looking distant ahead of EU CPI
The Euro heads into Wednesday's Consumer Price Index reading on a cautious note thanks to continued geopolitical tensions; final CPI figures for the wider Eurozone area drop today at 09:00 GMT …
GBP/USD: Cautiously bullish, eyes UK CPI
The outlook remains bullish as the momentum studies retain the bullish bias: 5, 10 and 21-day MAs trend north, indicating bullish setup. Moreover, reduced Brexit fears and May rate hike optimism are seen keeping GBP better bid in the short-run.
UK CPI to remain unchanged at 2.7 percent in March – Nomura
In the view of the analysts at Nomura, the UK headline inflation numbers are expected to remain flat in March, courtesy of a drop in fuel prices.
BOC Preview: No change expected in the April statement - Citi
Analysts at Citigroup offer a brief preview on what to expect from today Bank of Canada’s (BOC) monetary policy announcement due at 1400 GMT.
Is market volatility down to stay or just in a temporary lull?
As equity markets continued to rally sharply on Tuesday on the back of a strong start to corporate earnings season and decreased concerns over geopolitical risk, market fear as measured by the VIX volatility index continued to march lower.
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EUR/USD treads water just above 1.0400 post-US data
Another sign of the good health of the US economy came in response to firm flash US Manufacturing and Services PMIs, which in turn reinforced further the already strong performance of the US Dollar, relegating EUR/USD to the 1.0400 neighbourhood on Friday.
GBP/USD remains depressed near 1.2520 on stronger Dollar
Poor results from the UK docket kept the British pound on the back foot on Thursday, hovering around the low-1.2500s in a context of generalized weakness in the risk-linked galaxy vs. another outstanding day in the Greenback.
Gold keeps the bid bias unchanged near $2,700
Persistent safe haven demand continues to prop up the march north in Gold prices so far on Friday, hitting new two-week tops past the key $2,700 mark per troy ounce despite extra strength in the Greenback and mixed US yields.
Geopolitics back on the radar
Rising tensions between Russia and Ukraine caused renewed unease in the markets this week. Putin signed an amendment to Russian nuclear doctrine, which allows Russia to use nuclear weapons for retaliating against strikes carried out with conventional weapons.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
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