Asia kicked-off the week on a cheerful note, with the risk-on sentiment dominating across the financial markets, despite a number of mixed weekend headlines from the central bankers. Friday’s strong Chinese exports data, upbeat US banks earnings and renewed US-China trade optimism boosted the appetite for risk assets such as the equities, Antipodeans, the GBP, etc, at the expense of the safe havens gold, Yen, US dollar and Swiss France.
The USD/JPY pair consolidated near five-week tops reached at 112.10 while the Aussie traded modestly flat below 0.7180 levels, largely weighed down by weaker oil and gold prices. Oil dipped this session following the Russian Finance Minister’s jawboning over the weekend. Meanwhile, gold prices hit the lowest levels since April 5th and kept its range near 1290 region. The Kiwi emerged the top gainer across fx board, up +0.20% near 0.6780 levels, despite downbeat New Zealand’s (NZ) March services PMI. The strength is the Kiwi can be attributed to positioning unwinding heading to the key NZ CPI release due later this Wednesday.
Amongst the European currencies, the Cable bounced to 1.31 handle despite ongoing Brexit uncertainty while the EUR/USD pair held onto minor bids above the 1.1300 level amid broad USD weakness and mixed Treasury yields.
Main Topics in Asia
Key Focus Ahead
Following a data-sparse Asian calendar, the European session also remains a thin-showing amid a lack of first-tier macro releases. Hence, markets will continue to track the broader market sentiment and USD dynamics for near-term trading impetus. Meanwhile, the Swiss PPI release at 0630 GMT will fill in a dry EUR docket.
In the NA session, the Bank of Canada (BOC) Business outlook survey will be reported at 1430 GMT. Besides, the speeches by the BOE MPC member Haskel and FOMC member Evans will grab some attention later today.
The common currency may extend gains toward the 100-day MA, currently at 1.1345, in the European session. The bullish case looks stronger if we take into account the improved risk appetite in the markets.
The GBP/USD pair concentrated on the USD weakness amid lack of Brexit headlines. The US manufacturing data could be of immediate importance to the cable traders.
A first flash estimate of manufacturing PMI of the Eurozone, Germany and France for April will be released next week. In March, contrary to market expectations, manufacturing sentiment deteriorated once again
As Brexit is leaving some space for other factors, the economic calendar in the UK is quite packed. Three top-tier events await traders.
The Indonesian general elections will be held on 17 April 2019. For the first time in the country’s history, the president, the vice president, and members of the People’s Consultative Assembly (MPR), will be elected on the same day with over 190 million eligible voters.