Yet another quiet Asian session this Wednesday, with the Japanese currency having witnessed two-way trades versus the greenback amid reports of BOJ bond buying. While markets largely ignore the BOJ’s Summary of Opinions released earlier on the day. On the US side, the greenback traded subdued almost through Asia, although picked-up some bids as we moved towards Europe. Once again, Trump headlines drove the sentiment around the US dollar.
In the day ahead, there is nothing much to report in terms of the economic data from both Europe and the US. While the main highlight for today will remain the UK Brexit bill vote, as the bill goes to its third and final reading in the Commons later today. While BOE MPC member Cunliffe’s speech due ahead of the US open will also remain in focus.
Main topics in Asia
The Bank of Japan has announced it will buy 400 bn yen maturing in 1-3y, 420bl yen in 3-5y, 450bn in 5-10y and 250bn in inflation indexed JGBs.
Reuters reporting latest headlines on Trump’s travel ban US court hearing, noting that the US Appeals Court ended the hearing over Trump travel ban without announcing a ruling.
Reuters quoting sources familiar with the White House discussions, citing that the US President Donald Trump is planning to issue an executive order targeting a controversial Dodd-Frank rule.
The Nikkei Asian Review reports headlines from the BOJ on Wednesday, citing that the central bank’s holdings of Japanese government bonds have topped 40% of the outstanding balance for the first time.
Key focus for the day ahead
Analysts at TDS provide a brief preview of what to expect from the UK Brexit bill vote that is scheduled later today.
The EUR/USD pair failed to sustain a minor-recovery seen in early Asia, and now drifts lower as we head towards the European morning bells.
The Global FX Strategy team at RBC says that the RBNZ could attempt jawboning the NZD through dovish comments… leading to a flatter yield curve.
Natixis ‘Strategic Daily’ note says the political risks will end up weighing on the EUR/USD in the short-term and contribute to the pair correcting towards parity come June.
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