Forex Today: Risk-on at full steam on better China PMI; a busy calendar ahead
Risk-on sentiment extended into Asia on the first day of the week and was further bolstered by an unexpected expansion seen in the Chinese Caixin manufacturing sector activity data while markets continued to cheer the progress on the US-China trade talks. The Chinese proxies and risk assets were lifted by the risk-on rally in the Asian equities and commodities, with the Aussie looking poised to test the 0.7150 barrier while the Kiwi rallied to 0.6835 levels. The USD/JPY pair reached highs near 111.20 before retreating to the 111 handle amid reduced demand for the safe-haven US dollar across its main competitors. As a result, both the Euro and the GBP also traded firmer, with the bulls now awaiting fresh fundamental catalysts for the next push higher.
Main Topics in Asia
Brexiteers look to run down the clock, but MPs backing a customs union stand in their way
Berlin Govt: Germany to let Britons stay if UK leaves EU without deal
ECB Needs Clear Monetary Policy Case for Tiering, Knot Says - Bloomberg
China State Council: China will continue to suspend extra tariffs on US vehicles, auto parts
NAB Monthly Business Survey March 2019: Employment improving, potentially bullish for AUD
New Zealand Treasury: March quarter economic indicators mixed
China's Caixin manufacturing PMI unexpectedly jumps to 50.8 in March, Aussie firmer
Brent Technical Analysis: Probing 50% Fib hurdle, bulls need progress soon
AUD Bullish: Goldman Sachs ups iron-ore price forecast
Asian stocks cheer progress in US-China trade talks, upbeat China data
Gold looks to regain $1300 post better China data
Fed to remain on hold through this year – Morgan Stanley
China and New Zealand sign an agreement on eliminating double taxation - Reuters
Key Focus Ahead
Following the cheerful Asian session, markets buckle up for a busy start to the EUR calendar this week, with a raft of final manufacturing PMI releases due on the cards from across the Euro area economies from 0715 GMT. Ahead of the PMI reports, the Swiss retail sales data will be published at 0630 GMT. At 0830 GMT, the UK manufacturing PMI will be released for the month of March while the Eurozone flash CPI report will be closely eyed at 0900 GMT for fresh EUR trades amid recent dovish tone adopted by the ECB on its monetary policy.
On the Brexit update, the UK lawmakers will once again vote on Brexit indicative proposals following last week’s rejection, as markets now price-in a softer Brexit heading into the April 12th Brexit deadline.
The NA calendar also has plenty of event risks, including the key US retail sales and ISM manufacturing PMI reports due at 1230 GMT and 1400 GMT respectively among a few minority reports. Also, of note remains the Canadian Markit manufacturing PMI release that will drop in at 1330 GMT.
EUR/USD may cheer upbeat China data ahead of Eurozone CPI and US retail sales release
Any gains to 1.1250 or above, however, could be erased if the preliminary Eurozone consumer price index (CPI), due for release at 09:00 GMT, prints well below estimates, validating the ECB's recent dovish turn.
GBP/USD fails to benefit from softer USD ahead of UK/US data, Brexit parliament vote
The members of the UK parliament (MPs) are up for voting on various indicative Brexit proposals on Monday whereas data from the UK and the US will also be in limelight.
GBP/USD Forecast: Until Parliament says I do, the Brexit suffer-fest continues
If nothing changes, the UK leaves the EU on April 12th, but many things can happen in the interim. The only certainties are that Parliament will hold a second round of Indicative Votes (IV2) on Monday.
US Retail Sales: Back to normal consumption? It could cheer markets, but not the USD
Headline sales are projected to rise by 0.3% in February, sales excluding cars by 0.3% as well, and the Control Group is forecast to advance by 0.4%, which is well within the normal ranges.
ISM Manufacturing PMI Preview: How worried are businesses? 3 scenarios for the potentially contrarian USD reaction
The ISM Manufacturing Purchasing Managers' Index for March is published on Monday, April 1st, at 14:00. The indicator is a survey of businesses that ask them about the current situation and prospects looking forward.