Risk Revives Into Close of Week But BOJ Stays Pat

Market Drivers March 15, 2019
Commdollars better bid
BOJ does not offer further easing
Nikkei 0.77% Dax 0.05%
Oil $59/bbl
Gold $1302oz.

Europe and Asia:
BOJ keeps monetary policy the same

North America:
USD Empire Man 8:30

Comments from Chinese state media that US-China trade talks have made substantive progress help revive risk in Asian and early European dealing with both Aussie and kiwi trading near session highs ahead of the New York open.

The positive note from Chinese authorities soothed some of the concerns of the market after the planned Trump Xi summit was rescheduled from March to April. There is still no assurance that US and China will reach a deal on trade, but both parties are clearly motivated as Mr. Trump seeks a much needed political win while President Xi is facing unrest over the slowdown of economic conditions at home.

Elsewhere, the BOJ held its policy steady keeping the benchmark rates at -0.1%. The market was looking for some more accommodation given the slowdown in the Japanese economy and ahead of the meeting USDJPY ran to a high of 111.90, but when BOJ simply stuck to its current policy goals the pair sold off to 111.48 before finding support once more. The 112.00 level remains a key resistance level for USDJPY but it could make another run at that level later today if US yields firm up.

There is no material economic data on the docket today, but the general mood in the market is pro-risk as some data out of Asia showed that economic conditions have started to stabilize in the region. If that theme persists Aussie could make a run at the .7100 figure and yen crosses should see further gains as the day proceeds.