Single Currency Waiting For ECB Protocol, Asian Markets Stabilized

Market Reviews

The Asian markets sentiment has rather stabilized. Nikkei reduced -0.26%. HK HSI fell -0.17%. DOW declined 0.9% to 24189.45. WTI oil broke 67 handle to reach the 4-year maximum on reports about attacks in Syria. Yellow metal rose to 1365.24 maximum but then didn’t manage to exceed 1366.95 resistance. And now, gold is trading under 1350. The greenback has reinforced but remained the second softest after the Yen. Euro is buoyed, waiting for today’s release of the ECB policy meeting protocol. This weekend, a high-level NAFTA negotiation will resume on the sidelines of the Summit of the Americas in Peru.

Yesterday’s FOMC protocol showed that members’ view about the economy and rate path hasn’t changed. Fed fund futures are still pricing in more than 95% odds of a June hike. Inflation was projected to pick up in the near term. Overall economic outlook has improved. Some issues, like trade tension with China month, were mentioned as well.

Haruhiko Kuroda (BoJ Governor) sounded very sanguine about the economy in his speech. The Governor said there was an improvement in output gap and medium- to long-term inflation expectations. As usually, he stressed that in order to reach the inflation target, BoJ should maintain its stimulus program.

The World Bank revised up its growth forecast for EAP (East Asia and Pacific). The growth for this year is expected to make up 6.3% (up from October’s forecast of 6.2%). China’s growth forecast was raised from 6.4% to 6.5%. The Organization said there’s a need “to address risks to macroeconomic stability, countries will need to consider tightening monetary policies and further strengthening macroprudential regulations”, adding that: “improving competitiveness will also be important for countries in the region as they seek to adjust to the ongoing changes in the manufacturing landscape with the evolution of technology.”

British RICS house price balance remained at 0 last month. Japanese M2 increased 3.2% yoy. Australian consumer inflation expectation reduced to 3.6% this month. Home loans fell -0.2% mom in February. Today, Eurozone will publish industrial production and ECB protocol. Canada will announce new housing price index. The US will feature import price index and unemployment claims.