Date : 31st May 2018.
MACRO EVENTS & NEWS OF 31st May 2018.
FX News Today
Asian Market Wrap: 10-year Treasury yields are down -0.5 bp at 2.850%, while yields rose across Asia as stock markets rallied. 10-year GDP yields are up 0.5 bp at 0.028%, Australia and China underperformed. Like European and U.S. stocks yesterday, equity markets across Asia recovered from the bout of heightened risk aversion as Eurozone breakup risks were being priced out again. China’s official manufacturing PMI unexpectedly improved which saw CSI 300 and Shanghai Comp outperforming with gains of 1.81% and 1.55% respectively. Topix and Nikkei are up 0.56% and 0.81% and the Hang Seng gained 0.91%. There is still plenty of risk with Sino-American trade relations in focus and U.S. tariff exemptions set to run out tomorrow and the Italian crisis is also far from over. So volatility is likely to remain high over the summer, complicating the tasks for global central banks that were heading for more policy normalisation.
FX Action: USDJPY has settled in the mid 108.0s after failing to sustain gains above 109.0 yesterday. Yen crosses are also lower, reflecting a generally firmer yen, albeit moderately so. This is turn reflects a more circumscribed view markets are taking of the situation in Italy, which has returned a bid to the Japanese currency. The Washington Post has also reported, citing three unnamed sources, that President Trump will later today announce tariffs on steel and aluminium on imports from Canada, Mexico and the EU. The month’s end has reportedly generated some demand for the Japanese currency, too. In data, Japan’s April industrial production disappointed at 0.3% m/m growth. The median forecast had been for 1.4% m/m growth, though the data hasn’t had a bearing on forex markets.
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