The US Dollar and Japanese Yen are reclaiming outright safe-haven status, soaring against the majors as broad-based risk aversion grips financial markets.
Talking Points
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US Dollar, Yen Rise as Risk Aversion Grips Financial Markets
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S&P 500 Index Futures Hint Sentiment to Stay Under Pressure
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US Empire Manufacturing Data, Citigroup Q1 Earnings on Tap
The US Dollar and Japanese Yen outperformed in overnight trade as broad-based risk aversion carried forward from Friday. Not surprisingly, higher-yielding and cycle-sensitive Australian, Canadian and New Zealand Dollars suffered the brunt of the selloff in the FX space. The MSCI Asia Pacific regional benchmark stock index fell 0.7 percent.
As we discussed in our weekly forecast, the move may reflect a market-wide shift in sentiment trends as signs of renewed weakness emerging in the March set of US economic data compound lingering recession in the Eurozone. Taken together with today’s disappointing set of Chinese GDP figures, this suggests all three of the world’s top growth engines (and over half of global GDP) are flashing warning signs.
Looking ahead, S&P 500 index futures are pointing sharply lower, hinting more of the same is likely ahead. The economic calendar is relatively quiet, offering little in terms of event risk to break the markets’ momentum. The US Empire Manufacturing gauge is set to show factory-sector activity in New York State slowed in April. Citigroup Inc is also due to deliver its first-quarter earnings report, with traders keeping a close eye on the bank’s forward guidance to help handicap global financial health trends.
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Asia Session:
| GMT | CCY | EVENT | ACT | EXP | PREV |
| 22:30 | NZD | Performance Services Index (MAR) | 55.4 | - | 55.5 |
| 23:01 | GBP | Rightmove House Prices (YoY) (APR) | 0.4% | - | 1.2% (R-) |
| 23:01 | GBP | Rightmove House Prices (MoM) (APR) | 2.1% | - | 1.7% |
| 1:30 | AUD | Home Loans (FEB) | 2.0% | 1.5% | -0.3% (R+) |
| 1:30 | AUD | Investment Lending (FEB) | 1.8% | - | 4.4% |
| 1:30 | AUD | Value of Loans (MoM) (FEB) | 1.2% | - | 1.2% |
| 2:00 | CNY | Fixed Assets Inv Excl. Rural YTD (YoY) (MAR) | 20.9% | 21.3% | 21.2% |
| 2:00 | CNY | Retail Sales (YoY) (MAR) | 12.6% | 12.6% | |
| 2:00 | CNY | Retail Sales YTD (YoY) (MAR) | 12.4% | 12.5% | 12.3% |
| 2:00 | CNY | Real GDP YTD (YoY) (1Q) | 7.7% | 8.0% | 7.8% |
| 2:00 | CNY | Real GDP (QoQ) (1Q) | 1.6% | 2.0% | 2.0% |
| 2:00 | CNY | Real GDP (YoY) (1Q) | 7.7% | 8.0% | 7.9% |
| 2:00 | CNY | Industrial Production YTD (YoY) (MAR) | 9.5% | 10.0% | 9.9% |
| 2:00 | CNY | Industrial Production (YoY) (MAR) | 8.9% | 10.1% | |
| 2:00 | CNY | Business Climate Index (1Q) | 125.6 | - | 124.4 |
| 2:00 | CNY | Entrepreneur Confidence Index (1Q) | 122.4 | - | 120.4 |
| 4:30 | JPY | Industrial Production (MoM) (FEB F) | 0.6% | - | -0.1% |
| 4:30 | JPY | Industrial Production (YoY) (FEB F) | -10.5% | - | -11.0% |
| 4:30 | JPY | Capacity Utilization (MoM) (FEB F) | 0.7% | - | 1.7% |
| 6:00 | JPY | Machine Tool Orders (YoY) (MAR F) | -15.7% | - | -21.6% |
Euro Session: