There were no material stats scheduled for release through the Asian session this morning, leaving the financial markets at the mercy of sentiment towards the U.S coalition led missile strike on Syria, lingering fear of a trade war between China and sentiment on the earnings season, with the U.S equity markets having responded poorly to the start of the season late last week.
Rising geo-political tension was evident in the Japanese Yen through the morning session, the Yen managing to rise by 0.12% to ¥107.22 against the U.S Dollar, with uncertainty over what’s next for Syria and a slide in the Hang Seng and CSI300 providing demand for the safe haven.
For the Aussie Dollar and Kiwi Dollar it was a mixed start to the day, the Aussie Dollar up $0.10% to $0.7771, while the Kiwi Dollar was down 0.15% to $0.7354, the pair having had mixed fortunes of late from a data perspective, as focus shifts to China’s 1st quarter GDP numbers due out tomorrow.
In the equity markets, the Hang Seng and CSI300 were down 1.48% and 1.53% respectively at the time of writing, with softer PMI and trade figures out of China expected to impact GDP numbers tomorrow.
For the pair, the financial sector saw the felt pain, with Bank of China and China Construction Bank on the slide, with a pullback in oil prices weighing on the energy sector.
The ASX200 managed to buck the trend and close out the day with gains in mining and resources stocks, with the big-4 banks providing support, the ASX200 up 0.20% for the day, while the Nikkei was up 0.21% ahead of the day’s close, the pair having given up larger gains from earlier in the day.
For the EUR, there are no material stats scheduled for release this morning, with the EUR up just 0.02% to $1.2333 at the time of writing.
Direction through the early part of the day will be hinged on market risk appetite, with Dollar weakness having propped up the EUR in spite of the more dovish then expected ECB monetary policy meeting minutes released last week.
Through the start of the day, the missile launch against Syria seemed to have a limited impact on the markets, though sentiment could turn later in the day, as the news wires become more active, with Russia, Iran and even Syria capable of antagonizing the situation at any given moment.
For the Pound, the markets will need to hold out for tomorrow’s employment figures to give any further clues on whether the BoE will make its move next month, but if the chatter is anything to go by, even softer economic indicators may not be enough to dissuade the majority from voting in favour of a move to manage inflation.
Adding to the upside has been rising confidence over Brexit, with the next set of talks on trade relations due to start in the coming week. While sentiment towards monetary policy is a contributor, it’s ultimately going to boil down to how the British government can negotiate on trade, any negative chatter and the Pound could be back down at sub-$1.40.
At the time of writing, the Pound was up 0.09% to $1.4255, adding to last week’s 1.59% rally, with Brexit noise the key driver.
Across the Pond, economic data out of the U.S is on the heavier side and includes the all-important March retail sales figures, with manufacturing PMI and business inventory numbers also due for release. Focus will be on the retail sales figures, with recent economic data out of the U.S having disappointed, making this afternoon’s numbers all the more relevant from a Dollar sentiment perspective.
At the time of writing, the Dollar Spot Index was down 0.03% to 89.769, with more than the stats influencing the Dollar at present, noise from the Oval Office and ongoing investigations into the U.S administration also there, with Trump having thrown Syria and stability in the Middle East into the mix last week.
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