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Comdolls cheered China’s better-than-expected data, but forex price action was dominated by concerns over Tillerson’s exit from Trump’s camp.

  • New Zealand’s current account deficit down from 4.83B NZD to 2.88B NZD in Q4 2017
  • Australia’s Westpac consumer sentiment up by 0.2% vs. 2.3% decline in March
  • Japan’s core machinery orders shoots up by 8.2% vs. 5.3% uptick expected, 9.3% decline previous
  • China’s industrial production (y/y) up by 7.2% vs. 6.2% expected and previous
  • China’s retail sales (y/y) up by 9.7% in February vs. 9.9% expected, 9.4% in January
  • China’s fixed asset investment (ytd/y) improves from 7.2% to 7.9% in February
  • BOJ’s Kuroda: It’s “possible to shrink the BOJ’s balance sheet” though it’s too early to debate specifics

Major Events/Reports:

Aftermath of Tillerson’s exit

As mentioned in the previous session, the Donald has unexpectedly fired his Secretary of State Rex Tillerson, which caused concerns that the Trump administration might favor more aggressive stances in critical geopolitical issues such as trade tariffs and Iran’s nuclear deal.

The Asian bourses didn’t appreciate the sudden change, especially since it might mean heavier tariffs for other U.S.-bound exports.

  • Nikkei is down by 0.97% to 21,755.3;
  • Australia’s A SX 200 is down by 0.17% to 5,922.5;
  • Hang Seng is down by 1.25% to 31,206.3, and
  • Shanghai index is down by 0.59% to 3,290.724.

Oil prices also felt some of the heat, while gold took advantage of overall dollar weakness.

  • Gold is up by 0.12% to $1,327.78;
  • Brent crude oil is down by 0.11% to $64.64, and
  • U.S. WTI is down by 0.03% to $60.80.

China’s data dump

Data from the world’s second largest economy showed retail sales improving by 9.7% from a year earlier in February. The pace is a tad lower than the expected 9.8% uptick, but it looks like it’s no biggie especially when compared to the other reports’ upside surprises.

Industrial production shot up by an annualized rate of 7.2% when analysts had only estimated a 6.1% gain. That’s the strongest since June 2017, yo! Apparently, production in mining, manufacturing, and electricity, gas and water saw improvements for the month.

Last but not the least is the fixed asset investment, which gained another 7.9% after rising by 7.2% in January. Components of the report showed that private and public investments have both continued to grow for the month.

Commodity-related currencies cheered the data early in the session, but at the end of the day, forex bulls weren’t too crazy about high-yielding currencies amidst uncertainty in the markets.

Major Market Mover(s):

USD
The Greenback took the biggest hits across the board as traders priced in their concerns over an incoming trade (and maybe geopolitical) war in store for the U.S.

USD/JPY is down by 14 pips (-0.13%) to 106.43;
USD/CHF is down by 11 pips (-0.11%) to .9430;
EUR/USD is up by 15 pips (+0.12%) to 1.2404, and
GBP/USD is up by 25 pips (+0.18%) to 1.3984.

Watch Out For:

  • 7:00 am GMT: Germany’s final CPI to remain at 0.5%?
  • 7:00 am GMT: Germany’s final CPI to remain at 0.5%?
  • 9:00 am GMT: Italy’s retail sales (-0.1% expected, -0.3% previous)
  • 10:00 am GMT: Euro Zone’s employment change (q/q) (0.3% expected, 0.4% previous)
  • 10:00 am GMT: Euro Zone’s industrial production (-0.4% expected, 0.4% previous)