Article Highlights

  • North Korea fires another missile ahead of Trump’s meeting with Xi Jinping
  • BRC shop price index (y/y) down by 0.8% vs. 1.0% decline in February
  • AU AIG services index shoots up from 49.0 to 51.7 in March
  • NZ ANZ commodity prices inches up by 0.4% vs. 2.0% increase in February
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Forex price action was as exciting as watching water boil, as Asian session traders stayed in the sidelines ahead of the FOMC meeting minutes and Trump’s meeting with China’s Xi Jinping.

Major Events:

BOJ trims asset purchases – As it announced last Friday, the Bank of Japan (BOJ) began trimming its purchases of short-term Japanese Government Bonds (JGBs) this month.

In its bond-buying operation today, the BOJ offered to buy 280B JPY worth of one- to three-year JGBs, which is not only 20B JPY less than its previous purchases but also marks the lowest level in almost three years.

Purchases of longer-term bonds are to remain unchanged, however, which is probably their yields inched higher ahead of tomorrow’s auctions.

Limited price action – The major currencies stayed in tight ranges during the Asian session thanks to a lack of major reports released and uncertainty ahead of big events coming up this week.

Chinese traders coming back from the holidays helped support risk appetite especially in early morning trading. It also didn’t hurt that Japan’s equities markets recovered some of its losses as the yen took a breather from its hot streak.

However, news of North Korea launching another intermediate range ballistic missile earlier today kept a lid on risk-taking. Meanwhile, other traders chose to stay in the sidelines ahead of the FOMC meeting minutes due later in the U.S. session and Trump’s much-awaited meeting with Xi Jinping scheduled tomorrow and on Friday.

In any case, Nikkei popped up by 0.21% and Australia’s A SX 200 inched 0.04%. The Shanghai index, now open after a long weekend, rose by 1.06% even as the Hang Seng index dipped by 0.11%.

Market Movers:

JPY – The low-yielding yen started the day on a weak note before risk aversion won out and erased most of its losses during the session.

USD/JPY hit a session high of 110.91 before settling down to 110.62 while EUR/JPY popped up to 118.46 before slipping to 118.11.

Ditto for GBP/JPY which rose to 138.00 before getting knocked back at 137.69 and AUD/JPY which slipped from a high of 83.98 to trade at 83.68.

Watch Out For:

  • 7:15 am GMT: Spanish services PMI (57.2 expected, 57.7 previous)
  • 7:45 am GMT: Italian services PMI (54.3 expected, 54.1 previous)
  • 7:50 am GMT: French final services PMI expected to remain at 58.5
  • 7:50 am GMT: French final services PMI expected to remain at 58.5
  • 8:00 am GMT: Euro Zone final services PMI expected to remain at 56.5
  • 8:30 am GMT: U.K. services PMI (53.5 expected, 53.3 previous)