• Asian equity markets traded mostly higher, albeit modestly so with the Nikkei 225 supported by strong export-based trade data
• NZD gained some ground against its major counterparts overnight amid encouraging domestic CPI figures
• Looking ahead, highlights include US weekly jobs, Philly Fed, Fed’s Powell, Rosengren and BoE’s Carney

ASIA

Asia equity markets traded mostly higher after sspanugging off the weak lead from Wall St., where weakness in the energy complex weighed on sentiment. ASX 200 (+0.3%) traded in the green as strength in financials upstaged losses in commodity related sectors, while Nikkei 225 (+0.4%) was led higher by Toshiba after interest surrounding its chip business gave shares a 4% boost, with strong Japanese trade data also underpinning exporter sentiment. In China, Shanghai Comp. (-0.1%) and Hang Seng (+0.3%) initially conformed to the improved tone amid reports of tax cuts and after the PBoC upped its liquidity injections, although the mainland bourse later failed to sustain the momentum. Finally, 10yr JGBs traded lower amid the increased risk appetite in the region, although prices were supported off the lows following a firm 20yr JGB auction in which the b/c rose to its highest since 2014.

PBoC injected CNY 70bln in 7-day reverse repos, CNY 20bln in 14-day reverse repos and CNY 10bln in 28-day reverse repos.

PBoC set CNY mid-point at 6.8792 (Prev. 6.8664). (Newswires)

Chinese regulators may set a minimum level for Hong Kong stock investment for Shenzhen and Shanghai stock connect-linked funds, according to press reports. (Newswires)

Japanese Trade Balance (Mar) 614.7B vs. Exp. 608B (Prev. 814B). (Newswires)

- Exports (Mar) Y/Y 12.0% vs. Exp. 6.2% (Prev. 11.3%)

- Imports (Mar) Y/Y 15.8% vs. Exp. 10.0% (Prev. 1.2%)

EUROPE/UK

Latest Harris French Presidential first round poll has Macron at 25%, Le Pen at 22%, Fillon at 19% and Melenchon at 19%

- 2nd round poll has Macron beating Le Pen with 66% support, Macron beating Fillon with 58% and Macron beating Melenchon with 60%.

ECB's Villeroy stated that negative rates clearly have their limitations and that the current policy stance remains fully appropriate. (Newswires)

Brussels has begun freezing British companies out of multibillion-Euro contracts, with top EU officials also calling on companies to consider an EU based office to maintain permission to conduct business. (FT)

FX

New Zealand CPI data took the spotlight as both Q/Q and Y/Y figures beat expectations. This led to some analysts forecasting increased scope for a sooner RBNZ hike, and bullish pressure for NZD/USD which also found support at 0.7000. Elsewhere, USD pairs held onto their recent losses as DXY moved towards yesterday’s highs, while USD/CNH traded flat despite the PBoC setting a weaker fix.

New Zealand CPI (Q1) Q/Q 1.0% vs. Exp. 0.8% (Prev. 0.4%); Y/Y 2.2% vs. Exp. 2.0% (Prev. 1.3%). (Newswires)

COMMODITIES

WTI crude futures attempted to nurse some of yesterday’s losses to briefly reclaim the USD 51.00/bbl level, although the recovery was minimal in comparison to the post-DoE sell off. Elsewhere, gold (-0.1%) languished amid an improvement in risk sentiment and as the greenback held on to its gains, while copper was dampened alongside broad-based weakness across the commodities complex.

US President Trump ordered a probe into foreign-made steel, according to officials. (Newswires)

GEOPOLITICAL

A Russian government think tank controlled by Russian President Putin developed a plan to swing the 2016 U.S. presidential election to Donald Trump and undermine voters’ faith in the American electoral system, according to US officials. (Newswires)

US

Fixed income markets failed to find any sustained direction with the 10y yield finding some support around 2.2%, the selling pressure that was seen tspanough US trade was accounted to pro accounts adding some pressure, the 10y T-note future settled at 127.08, down 8 ticks. Underperformance was evident in the belly of the curve; however, below average screen volume and lack of real money flows did further support the lack of any real decision.

Fed's Rosengren (Hawk, Non-voter) stated that the Fed could start sspaninking the balance sheet relatively soon. (Newswires)

Fed's Fischer (Soft Dove, Voter) stated that gradual rate hikes will mitigate spillover risks abroad. (Newswires)