Forex today witnessed a turnaround in the risk sentiment, as markets turned cautious and faded the early optimism induced by receding Hard Brexit fears and US-China trade talks.
Amongst the Asia-pac currencies, the Aussie failed a meaningful recovery past the 0.7130 barrier and reverted to the 0.71 handle amid risk-aversion making a comeback towards Asia closing. The Kiwi also stalled its upside at 0.6800 and met fresh supply amid a retreat in oil prices while the Yen recovered ground and turned positive, in response to fresh selling seen in the Asian equity markets and Treasury yields. The USD/JPY pair traded in a narrow range below mid-111s, with the bias leaning towards the downside.
Meanwhile, both the European currencies, the EUR and the GBP, traded better bid on the back of a broadly subdued US dollar, Brexit optimism and stronger Eurozone data. Gold prices on Comex lacked direction and traded near 1295 levels, awaiting fresh cues on the US-China trade talks.
Main Topics in Asia
313 For VS 312 Against – UK House Of Commons Passes Bill To Block A No Deal Brexit
May's talks with Labour on breaking Brexit deadlock likely to fail, Times quotes source
Sources: US sets 2025 target for China to fulfill trade pledges – Bloomberg
BoJ Kuroda: BoJ needs to continue easing persistently
Gold Technical Analysis: 1307 and the 38.2% are key to the upside, 1275 is key to the downside
WTI rally stalls on large US inventory build, focus on today's close
Moody’s: Asia’s credit fundamentals will show a rise in vulnerabilities
US 10-year treasury yield hits 12-day high on trade talks, Brexit optimism
Trump may announce plans for a summit with China’s President Xi on Thursday - WSJ
Key Focus Ahead
All eyes remain on further US-China trade talks, as the US President Trump meets with the Chinese Vice Premier Liu He at the White House later today at 2030 GMT. In the meantime, the risk trends will be driven by fresh Brexit-related developments, as markets await more clarity after the European Commission President Juncker rejected the UK PM May’s appeal for a short Brexit delay and speaker Bercow stopped the indicative votes next week.
On the macro events front, Andrew Robinson at MarketPulse notes: “German factory orders likely contracted for a ninth straight month on February. Surveys suggest orders fell 5.4% y/y following a 3.9% decline in January. The minutes of the last ECB meeting are due today, with focus squarely on discussions about the meager growth forecasts. There are more US jobs data releases today ahead of tomorrow’s nonfarm payroll report. Challenger job cuts for March and the weekly jobless claims are scheduled. Speeches from the Fed’s Mester and Williams complete the session.”
When are the German factory orders and how could they affect EUR/USD?
The German data, scheduled for release today at 06:00 GMT, are expected to show the factory orders increased 0.3 percent month-on-month in February, following a 2.6 percent drop in January.
The Brexit progress and market risk-on based upon the trade talks between the US and China favor GBP/USD buyers. Also, the lack of data could keep highlighting qualitative catalysts to watch.
President Trump to meet Chinese Vice Premier on Thursday - White House
The US President Trump will meet China's Vice Premier Liu He on Thursday, according to the White House statement. The meeting will take place at the White House.
German Chancellor Merkel to meet N. Irish PM Varadkar later today
Amidst ongoing Brexit chaos, Germany’s Chancellor Angela Merkel will visit Ireland's Prime Minister Leo Varadkar later today in order to discuss the Ireland / Northern Ireland border issue and the impact of Brexit, Reuters reports.
US NFP: Expect 165k in March vs. a subpar 20k increase in February - HSBC
Analysts at HSBC offer a sneak peek at what to expect from Friday’s US labor market report that will drop in at 1230 GMT.
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