In The News

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Asian stocks were mostly higher after sentiment rolled over from Wall St where all majors gained at least 1%
•    JPY weakened on safe-haven outflows amid the heightened global risk appetite which supported USD/JPY firmly above 106.00
•    Looking ahead, highlights include US Durables (R), APIs, GDT Auction and a slew of speakers  

ASIA

Asian stocks were mostly higher after sentiment rolled over from Wall St where all majors gained at least 1% after trade war fears somewhat abated and amid encouraging data releases. This positive momentum gathered pace across Asia-Pac bourses with ASX 200 (+1.1%) also underpinned by strength across the energy sector, and Nikkei 225 (+2.0%) outperformed as exporters cheered a weaker JPY. Elsewhere, Hang Seng (+1.7%) joined in on the elation, while the Shanghai Comp. (-0.8%) initially retreated amid a glum tone in the mainland after the PBoC refrained from liquidity operations, but then later conformed to the region. Finally, 10yr JGBs were subdued with demand sapped amid gains across riskier assets and a mixed 30yr auction result.

BoJ Governor Kuroda said BoJ is keeping policy accommodative and that the central bank cannot weaken extent of monetary easing nor end easing when inflation hasn't yet reached the target. However, Kuroda added that they will obviously debate on exit strategy once target is achieved and that the central bank is brainstorming how a future exit could impact the balance sheet. (Newswires)

PBoC skipped open market operations. (Newswires)
PBoC set USD/CNY mid-point at 6.3386 vs. Prev. 6.3431

UK/EU

UK PM May was said to have invited Conservative MP’s who were trying to soften her Brexit stance into Downing Street for peace talks yesterday evening. (Independent)

UK Chancellor Hammond stated that the government could continue contingent planning for a no-deal scenario until the transcription ends in around 2 or 3 years. (Independent)

EU’s Barnier aide Rynck said unlikely to have clarity on UK regarding a future relationship by this autumn and that a transition agreement is only certain at the end of Brexit talk when legal text is approved, while it was also reported that EU is planning to offer a vague trade deal. (Newswires)
UK BRC Retail Sales YY (Feb) 0.60% vs. Exp. 0.50% (Prev. 0.60%). (Newswires)

UK Barclaycard Consumer Spending (Feb) 3.8% vs. Exp. 3.9%. (Newswires)

Italy’s Renzi has resigned as democratic party leader following the Italy election defeat. (Newswires)

FX

JPY weakened on safe-haven outflows amid the heightened global risk appetite which supported USD/JPY firmly above 106.00, although some gains were later pared after comments from Kuroda that the BoJ were brainstorming on the impact an exit would have on the BoJ’s balance sheet. USD was also softer overnight in which the DXY slipped back below the 90.00 level to the benefit of EUR/USD, while GBP/USD was less decisive amid Brexit overhang. Elsewhere, AUD/USD gained on a weaker greenback but saw brief pressure following a miss on Current Account and Retail Sales data, while the RBA rate decision failed to spur any meaningful price action as it kept rates unchanged as unanimously expected and mostly stuck to reiterations in its statement.  

RBA Interest Rate Decision (Mar) 1.50% vs. Exp. 1.50% (Prev. 1.50%). RBA reiterated it judged holding policy rates is consistent with sustainable economic growth and reaching the inflation target, while it also repeated that a strengthening exchange rate could slow pace of economic activity and inflation. Furthermore, RBA also stated that low level of rates continues to support domestic economy and that the outlook is for faster growth this year than last year, while it added that wage growth is to remain subdued for some time and gradually pick up. (Newswires)

Australian Current Account Balance (Q4) -14.00B vs. Exp. -12.30B (Prev. -9.10B, Rev. -11.0B). (Newswires)
Australian Retail Sales MM (Jan) 0.1% vs. Exp. 0.4% (Prev. -0.5%)
Australian Net Exports Contribution (Q4) -0.50% vs. Exp. -0.60% (Prev. 0.00%)

COMMODITIES

Commodities were uneventful overnight with WTI crude futures taking a breather but still holding on to the prior day’s gains following recent demand growth forecasts by the IEA comments from OPEC’s Barkindo. Elsewhere, gold price gained marginally amid a subdued green back, while copper also benefitted amid the heightened global risk appetite.

OPEC Secretary General Barkindo stated that everyone has gained from OPEC-led output cuts and that demand has not been this solid & positive in a long time. (Newswires)

IEA Executive Director Birol stated that there are no signs of peak oil demand. (Newswires)

GEOPOLITICAL

US is said to consider new military action against the Syrian government. (Washington Post)

North Korean Leader Kim stated that it is his firm will to advance inter-Korean relations and write new history of unification, while Kim is also reported to have agreed to meet with South Korean President Moon following talks. (KCNA/Newswires)

US

US President Trump said if a good deal can be made on NAFTA then steel tariffs can be addressed for Canada and Mexico, while he also stated that he is not backing down on Trade and that he doesn’t think there will be a trade war. In addition, there were also reports that US President Trump to meet with US companies that use steel and aluminium on Thursday to discuss planned tariffs. (Newswires)

US Trade Representative Lighthizer said NAFTA talks have not made progress they had hoped for, while he added that Canada and Mexico will get a tariff exclusion with a new NAFTA agreement which will be an incentive to conclude a deal. (Newswires)

US Republican Senator Cochran is to resign on April 1st amid health complications