The commodity-currencies emerged the top gainers in Asia this Wednesday, with the Aussie leading the pack on the back of solid Australian Q1 GDP figures while the Loonie gained on news of potential US metals tariffs exemption on Canada. The Kiwi also followed suit, benefiting from higher Asian equities and oil prices while a lift in New Zealand’s commodity price index also helped underpin the sentiment around the spot. The Yen was the main laggard, as the USD/JPY pair reached once again for the 110 handle amid higher Treasury yields and downbeat Japanese real wage growth data. Meanwhile, both the EUR and GBP remained better bid, with the common currency buoyed by ECB QE exit talks and easing Italian political woes.
Main topics in Asia
Treasury Secretary urging Trump to exempt Canada from steel and aluminum tariffs – ABC News
The news comes from ABC News stating that at a White House trade meeting on Tuesday, Treasury Secretary Steven Mnuchin urged President Donald Trump to exempt Canada from steep steel and aluminum tariffs.
USD/CAD drops as the Loonie gets a boost from tariff headlines
Loonie pops on headlines that the US’ Mnuchin is trying to secure an exemption for steel tariffs.
World Bank: Trade tensions could see a 2008-esque crisis – The Guardian
As reported by The Guardian, the World Bank has warned that ongoing trade tensions could have “severe consequences” for global growth.
Japan’s inflation-adjusted real wages showed no growth in April
Japanese workers’ inflation-adjusted real wages showed no growth in April, indicating consumer spending could remain weak in the near future.
Reserve Bank of New Zealand to consult on new capital adequacy documents in late 2018
Livesquawk reports the latest headlines from the Reserve Bank of New Zealand (RBNZ), citing that the New Zealand’s central bank is likely to consult on new capital adequacy documents in late 2018.
Australia’s Q1 GDP betters estimates as expected
Australian economy expanded 1 percent in the first quarter following the fourth quarter’s 0.4 percent growth.
China’s central bank injects CNY 463bn via medium-term lending facility
The People’s Bank of China (PBOC) skipped Open Market Operations (OMOs) today, but injected 463bn Yuan via medium-term lending facility (MLF) for one year at a rate of 3.3%.
Key Focus ahead
The EUR calendar is seen thinning out as we head into mid-week, with nothing of note today, except for the second-liner Swiss CPI and Eurozone retail PMI releases. Amongst the central bankers’ speech, the European Central Bank (ECB) Chief Economist Peter Praet is due to speak at 0630 GMT while the Bank of England (BOE) MPC member Tenreyro is scheduled to deliver a speech titled ‘Productivity Matters: What is the state of trade?’ at the Confederation of British Industry Economic Briefing, in Belfast.
Later in the NA session, the trade figures from both the US and Canada will be slated for release alongside the releases of the Canadian building permits and Ivey PMI. Meanwhile, the US EIA crude oil inventories will be eyed ahead of the BOE MPC member McCafferty’s speech.
EUR/USD: Put premium drops sharply on ECB QE exit talk, Italy relief
The EUR/USD closed above 1.17 yesterday on news the European Central Bank (ECB) will debate QE exit at next week’s meeting in Latvia. The uptick in EUR/USD could also be associated with Italy PM Conte saying his country has no plans to leave the Euro.
EUR/USD Technical Analysis: Euro showing signs of reversal to the upside
We might see the Euro consolidate at this price level before making its next move. A break above 1.17760 could provide a clear path for its future short to medium term direction.
Canada: Trade figures for April may be poised for a setback – Scotiabank
Analysts at Scotiabank are out with their expectations on today’s Canadian trade balance data due to be reported at 1230 GMT.
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