• Asian equity markets were negative as the region lacked impetus following the non-existent lead from the US
• UK Conservative Party lawmaker Rudd warned PM May she could face dozens of ministerial resignations next week if Tory MPs are banned from voting for a plan that helps stop a no-deal Brexit
• UK opposition Labour Party leader Corbyn has given in to pressure from party members and MPs by endorsing a plan to force a second EU referendum
• Looking ahead, highlights include UK Jobs Report, German ZEW, US Existing Homes Sales, New Zealand CPI
• Earnings: Capital One Financial, Halliburton, IBM, Johnson & Johnson, Travelers Companies, United Technologies and Prologis

ASIA-PAC

Asian equity markets were negative as the region lacked impetus following the non-existent lead from the US due to Martin Luther King Jr. Day and as the slowest growth in China in nearly 3 decades continued to reverberate across risk sentiment. ASX 200 (-0.5%) was led lower by underperformance in its largest weighted financials sector and with miners dampened following softer output numbers by BHP, while Nikkei 225 (-0.6%) was also pressured with losses later exacerbated by currency flows. Hang Seng (-1.2%) and Shanghai Comp. (-1.1%) conformed to the downbeat tone in the aftermath of the recent Chinese growth figures which some expect to further deteriorate this year and after the PBoC refrained from open market operations for a 2nd consecutive day which resulted to a net daily drain of CNY 80bln, while there were also reports the US is to proceed with the formal extradition of Huawei's CFO. Finally, 10yr JGBs were underpinned amid the uninspiring risk tone in the region and as yields also declined in the super long-end in which the 40yr yield drop to its lowest since 2016.

PBoC skipped open market operations for a net daily drain of CNY 80bln. (Newswires)
PBoC set CNY mid-point at 6.7854 (Prev. 6.7774)

UK/EU

UK PM May's spokesperson said there is shared determination from the PM and EU leaders that they want the UK to leave with a deal. (Newswires)

UK Conservative Party lawmaker Rudd warned PM May she could face dozens of ministerial resignations next week if Tory MPs are banned from voting for a plan that helps stop a no-deal Brexit. (Times)

UK PM May's chief Brexit negotiator, Oliver Robbins, privately cast doubt on her ability to renegotiate the Irish backstop as part of her Brexit "plan B", The Telegraph has been told. (Telegraph)

UK opposition Labour Party leader Corbyn has given in to pressure from party members and MPs by endorsing a plan to force a second EU referendum. (Telegraph)

Cross-Channel freight trade 'could drop by 87%' under 'no-deal' Brexit according to reports which cited documents from the Border Force showing freight trade may operate at as little as 13% of its current capacity for 6 months. (Sky)
 

FX

In FX markets, the DXY was relatively rangebound amid the holiday-thinned conditions although has marginally benefitted as price moves across its major counterparts were largely dictated by the risk averse tone. As such, EUR/USD and GBP/USD were mildly pressured overnight, although the latter remained in proximity for a retest of the 1.2900 level following the prior day’s swings as UK PM May presented her so-called ‘Plan B’ which commentators suggested seemed suspiciously like Plan A, while PM May also stressed the only way to rule out a no deal is to find an agreement. Elsewhere, USD/JPY initially consolidated as the BoJ began its 2-day policy meeting but was later pressured amid a deterioration in risk sentiment, while antipodeans were subdued due to their high-beta characteristics, softness across the commodities complex and after the PBoC weakened the reference rate.
 

COMMODITIES

Commodities were subdued overnight due to the risk averse tone in which oil prices declined by over 1% with WTI crude futures pulling back from resistance at the 54.00/bbl level and with Brent crude testing 62.00/bbl to the downside. Elsewhere, gold was range-bound as it reflected similar price action in the greenback following the absence of US participants, while copper underperformed as sentiment gradually deteriorated throughout the session.

Canadian province Alberta is expected to announce CAD 2bln oil sector investment plan, in which Alberta Premier Notley is reportedly to announce a CAD 2bln facility to squeeze more oil into clogged pipelines. (Globe and Mail)

US

US President Trump tweeted that China posted slowest economic numbers since 1990 due to US trade tensions and new policies, while he added it makes so much sense for China to do a real deal and stop playing around. (Twitter)

US is to proceed with formal extradition of Huawei's CFO Meng. (Globe and Mail)