Morning Report APAC: Asian markets open mixed
- Asian markets opened mixed; the Nikkei and Kospi were both higher
- The US Vice-President will meet Japan's Deputy Prime Minister Taro Aso
- USTs reversed gains driven by fresh comments from Treasury Secretary Mnuchin
By Saxo APAC Sales Trading
Economic data of the day (Singapore Time; GMT+8hrs)
- 0930 – AU – Reserve Bank of Australia April rate meeting minutes
- 2100 – US – Federal Reserve's Esther George speaks at Bard College Conference
- North Korea's UN envoy warned that the US has pushed the Korean peninsula to the "brink of war," as the Trump administration kept up its rhetoric against Kim Jong Un's regime. Russia's foreign minister urged the White House to avoid unilateral force, even as presidential aides pushed China to use its influence with Pyongyang and Vice-President Mike Pence travels to Tokyo to meet the Deputy Prime Minister. The State Department said the US isn't seeking a regime change. (Bloomberg)
- Marine Le Pen and Emmanuel Macron's support for the April 23 first round of France's presidential election rose half a point to 23% and 24% respectively, according to the latest Elabe poll. Francois Fillon and Jean-Luc Melenchon each slipped half a point to 19.5% and 18%. Macron would defeat any contender in the second round with about 60% of the vote.
- Fillon's sliding poll numbers don’t faze him. The Republican candidate said he’s "absolutely convinced" he’ll make it into the second round, AFP reported.
- USD was very quiet overnight. Stocks rallied back almost 1% and the USD rallied slightly after US Treasury Secretary Steven Mnuchin said USD strength was a “good thing”.
- USDJPY managed to close above the 200d MA, which is at 108.85.
- GBPUSD is still trading in the tight range made by the 100d MA and 200d MA at 1.2419/1.2623.
- Emerging markets: USDTRY rallies back hard despite a gap lower at the open to finish at the highs and way above the 100d MA. USDCNH was fairly quiet despite the strong GDP numbers.
Foreign exchange movements
- Cross/JPY gamma is bid going into the French elections despite the VIX drop following the rally in equities.
- Risk reversal in EUR crosses downside is getting much less liquid ahead of the elections and still favour a strong move to the downside.
- USTs reversed gains while most European markets were closed, driven by fresh comments from Treasury Secretary Steven Mnuchin, who said a strong currency is good over time.
- However, 10-year yield short-term technicals may seek support at 2.177%, the 50% retracement of the post-election day selloff.
- The US market closed higher with all three indices up close to 0.9% but with low volumes as most European markets were still closed for the holiday.
- Netflix reported its first-quarter result yesterday whose EPS came in at $0.40 against an estimate of $0.37, although it missed its subscribers target. Concerns of subscriber growth were dismissed as it expects international subscriber growth to continue at a much faster pace than analysts estimated. The show, House of Cards being pushed to the second quarter should see an increase in subscriber growth. Netflix closed 3% higher to finish at $147.03.
- Finally some good news for the United Airlines as earnings beat estimates. EPS came in at 3 cents higher than the $0.38 estimates from streets. United Airlines closed 2.5% higher to $70.77.
US Vice-President Mike Pence will meet with Japan's Deputy PM Taro Aso. Photo: Shutterstock.
– Edited by Gayle Bryant
This report was compiled by the Saxo APAC Sales trading team in Singapore – the home of social trading. Follow the team on @SaxoStrats or post your comment below to engage with Saxo Bank's social trading platform.
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