Asia has seen equities lead and risky FX lag, with subdued performances across G10 and EM FX for the most part, apart from underperformance in THB. Headlines wise, FOMC minutes did little to move the needle in NY, and in Asia since, there have been no material headlines either. However, ahead, another round of USD jobless claims as well as an appearance by Fed Chair Powell could provide more direction. Note too that we await ECB minutes today. Otherwise in EM, data is predominantly concentrated in Latam, with MXN & CLP CPI, Banxico minutes and a PEN rate decision (hold) on the slate.
RBC Capital Markets
With minimal data due, the focus is again on central banks today. There is full schedule of speakers including Fed Chair Powell at the IMF meeting and Bullard on monetary policy. The ECB releases the account of last month’s meeting and the RBA’s Financial Stability Review is a downside risk for AUD (see AUD below). Data‐wise, the UK’s construction PMI is expected to remain firm and the US weekly jobless claims are expected to continue trending down. China’s March CPI data are out overnight.
Sentiment remains firm as the FOMC Minutes as well as a speech by Fed Governor, Lael Brainard, point to progress in the US economic recovery as being strong, but that more needs to be seen before the Fed would consider reducing monetary stimulus. There remain some pockets of concern amongst investors about Covid-19 with the UK variant spreading in the US and more countries suspending the use of the AstraZeneca vaccine.S&P500 futures were trading and a majority of Asian bourses were trading higher at the time of writing.G10 FX was again trading in tight ranges in Asia with the USD weakening on the back of dovish Fed speak with the GBP, CHF and JPY leading gains against the underperforming USD. The CAD and NOK were also underperformers in the Asian session.
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