• Asian Equities traded with little in the way of firm direction amid holiday-thinned trade with the USD trading in a similar manner
• The RBA kept rates on hold at 1.50% as expected and struck a mildly cautious tone
• Looking ahead, highlights include UK Construction PMI, US Trade Balance, ECB’s Draghi, ECB’s Liikanen and Fed’s Tarullo

ASIA

Asia equity markets traded subdued amid holiday-thinned trade and following a lacklustre US close where sentiment was dampened by poor auto sales data for March. ASX 200 (-0.4%) was weighed by weakness in telecoms and financials, although the downside has been stemmed by buoyant commodity-related sectors. Nikkei 225 (-1.3%) lagged in the region amid a stronger JPY with Japanese auto makers also feeling the brunt from poor US sales, while markets in Mainland China and Hong Kong remained closed due to public holiday. 10yr JGBs trade higher with demand supported by safe-haven flows and after an encouraging 10yr auction where the b/c and accepted prices increased from last month, while the curve steepened with underperformance observed in the super long end.

EUROPE/UK

Latest IFOP French Presidential Election Poll, second round Macron 60% vs. Le Pen 40%. (Newswires)

Greece and its creditors are said to be planning to hold bailout talks today. (Newswires)

FX

USD-index remained rangebound amid a lack of participants with China, Hong Kong, Taiwan and Indian markets closed for public holiday. JPY strengthened vs. its major counterparts alongside a risk off tone in the market, fuelling safe-haven flows into the currency and which saw GBP/JPY decline below 138.00. AUD was initially underpinned following better than expected Trade data, although gains were reversed after RBA Rate decision where the central bank kept rates on hold at 1.50% as expected and struck a mildly cautious tone as it sees a gradual pick-up in inflation and medium-term China risks.

RBA kept the Cash Rate unchanged at 1.50% as expected and commented that unchanged policy is in line with growth and inflation targets. RBA also stated that the pick-up in inflation is expected to be gradual and that China faces medium term economic risks. (Newswires)

Australian Balance of Trade (Feb) 3.57B vs. Exp. 1.80B (Prev. 1.30B, Rev. 1.50B)

Exports (Feb) M/M 1% (Prev. -3%)

Imports (Feb) M/M -5% (Prev. 4%)

S&P lowered the South African sovereign credit rating to BB+ from BBB, while Moody's placed South Africa Baa2 rating on downgrade review. (Newswires)

COMMODITIES

The commodities complex mostly lacked direction amid absence of participants including the world’s largest consumer China, which kept copper and WTI crude futures trading sideways tspanoughout the session. Elsewhere, gold (+0.2%) prices printed one-week highs with the precious metal underpinned by a weakening greenback and as the risk averse tone spurred increased demand for safe-haven assets.

US

US treasuries posted solid gains for the first day of the quarter with real money buying observed in the belly, which outperformed the curve. Finally, Jun’17 10y T-note futures settled at 125.01, up 15 ticks.

Fed's Harker (voter, neutral) repeated that he supports two more hikes in 2017 and added that there is no need to rush hikes but doesn’t also want to fall behind the curve. Harker also stated that ending reinvestments may be appropriate at the end of the year but timing depends on evolution of the economy (Newswires)

US White House is to unveil a new Obamacare repeal deal today, according to sources. (Twitter) This follows a meeting in which US Vice-President Pence and White House Chief of Staff Priebus met with the Freedom Caucus to discuss reviving the healthcare legislation. After the meeting, House Freedom Caucus Chairman Meadows commented that White House officials laid out healthcare plans which allow states to opt out of Obamacare insurance mandates and that the plan is encouraging, but more info is needed prior to reaching an agreement. (Newswires)