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A renewed risk-on wave gripped the financial markets across Asia on the final trading day of the week, as markets cheered upbeat US growth numbers and Chinese Caixin factory sector activity report that calmed global economic slowdown fears. Hence, investors flocked to the risk assets at the expense of the safe-havens.

Among the Asia-pac currencies, the safe-haven Yen was the biggest loser, with USD/JPY having extended its recent upsurge to ten-week tops near 111.80 levels. The JPY bulls were unimpressed by above estimates Japanese CPI and capital spending data released in early Asia. The Aussie rallied briefly above the 0.71 handle following better Chinese manufacturing PMI but failed to resist above the last amid the latest leg up in the US dollar across its main competitors. The USD bulls got a boost from the Fed Chair Powell’s upbeat remarks on the US economy. Meanwhile, the Kiwi held onto gains above the 0.6800 level amid firmer oil prices and a solid rise in New Zealand’s building permits data.  

Looking at the related markets, the Asian markets traded broadly higher, led by the rally in the Japanese indices. Both crude benchmarks traded with moderate gains, with WTI well above the 57 barrier. Gold prices on Comex refreshed two-week lows near 1312 levels, having faded its recovery at 1316.45.  

Main Topics in Asia

US said to ready final China trade deal as hawks urge caution – Bloomberg

Fed’s Powell: Fed patient and watching risks

Gold recovers toward $1315 as Fed’s Powell speaks

China’s Caixin manufacturing PMI rebounds to 49.9 in Feb, a big beat – Aussie regains 0.71

S. Korean FinMin: Result of Hanoi Summit could increase volatility in financial market

Senior US State Department Official: N. Korea asked for all sanctions lifted except for armaments

Brent oil: Bounce stalled near $66.60 on surging US supply and global economic slowdown

WH Econ Adviser Hassett: US made enormous progress in trade talks with China

USD/INR Technical Analysis: Range breakdown confirmed, cautiously bearish

US Secretary of State: North Korea asked for full sanctions lifting

Asian stocks strengthen as buyers cherish latest data, US-China trade and MSCI news

Key Focus Ahead

The German retail sales report at 0700 GMT is expected to kick-in a data-busy EUR calendar today, soon followed by the Swiss retail trade and manufacturing PMI reports at 0730 GMT and 0830 GMT respectively. Also, a raft of final manufacturing PMI reports will be published from across the Euro area economies, starting from 0815 GMT to 0900 GMT. The key highlight in Europe is likely to be the manufacturing PMI from the UK docket due at 0930 GMT and Eurozone flash CPI release at 1000 GMT among other minority reports.

The NA session is equally busy, as the traders see a fresh batch of US economic news, including the core PCE price index and personal spending at 1330 GMT. Parallely, the Canadian Q4 GDP report is slated for release. At 1430-1445 GMT, the Markit manufacturing PMI reports from both the US and Canada will be published. However, the US ISM manufacturing PMI and UoM consumer sentiment data (due at 1500 GMT) will hog the limelight. Next of relevance remains the speech by the FOMC member Bostic  and Baker Hughes US oil rigs count data that will drop in at 1800 GMT.

EUR/USD: Rally paused ahead of German jobs and Eurozone inflation data

A re-test of 1.1407 cannot be ruled out, especially if the German jobs data, due at 08:55 GMT and the  Eurozone  preliminary CPI number, scheduled for release at 10:00 GMT, beat estimates by a big margin.  

GBP/USD: Bears await fresh clues heading into UK manufacturing PMI

February month readings of the UK Markit manufacturing purchasing manager’s index (PMI) and the US ISM Manufacturing PMI should gain immediate market attention. Among them, the British Markit manufacturing PMI will be the first one to appear with forecast favoring 52.0 figure against 52.8 prior.

Canada GDP Preview: Canadian GDP is expected to decelerate with slowdown seen temporary

Even with Canadian growth stagnating in December and decelerating to 1.2% quarterly annualized rate in the fourth quarter of 2018, the Canadian Dollar is still relatively cheap to the shift in growth expectations.  

RBA to remain patient – Bank of America Merrill Lynch

Analysts at Bank of America Merrill Lynch  believe  that a potential rebound for fourth-quarter growth rate, increased focus on the first quarter data and upcoming Federal Elections will likely allow the Reserve Bank of Australia (RBA) to remain patient on policy guidance.