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Plot twist! Instead of fighting fury with fire, China’s Xi Jinping preached an “open” Chinese economy and lower tariffs for products including autos.

  • U.K.’s BRC retail sales monitor (y/y) accelerates from 0.6% to 1.4% in March
  • Australia’s NAB business confidence down from 9 to 7 in March
  • Australia’s NAB business conditions down from 21 to 14 in March
  • China President Xi Jinping to further open up Chinese economy, “significantly” lower import tariffs on autos

Major Events/Reports:

Xi Jinping’s speech

The biggest story of the hour is China’s President Xi Jinping giving his speech at the Boao Forum – dubbed the “Asian Davos” – earlier today. In it the leader of the world’s second largest economy discussed his plans to further open up the Chinese economy.

He proposed that countries should “stay committed to openness, connectivity and mutual benefits, build an open global economy, and reinforce cooperation within the G-20, APEC and other multilateral frameworks.

Though there were no concrete and detailed plans yet, Xi Jinping specified that opening up China’s economy includes “significantly” lowering import tariffs for products including autos; increasing imports; lowering foreign-ownership limits on manufacturing, and expanding protection to intellectual property.

If you think those issues are familiar, that’s because those have been at the center of Trump’s trade-related grievances. Think the Donald will take Jinping’s remarks as #winning?

Risk-taking ensues

The surprisingly non-combative remarks were welcomed with open arms during the Asian session after a surprise raiding of Trump’s lawyer and speculations of escalating trade tensions limited risk-taking in the previous session.

Asia’s auto-makers, for example, mooned on the prospect of a more open Chinese market.

  • Nikkei is up by 0.75% to 21,841.0
  • Australia’s A SX 200 is up by 0.79% to 5,845.1
  • Hang Seng is up by 1.14% to 30,574.5
  • Shanghai index is up by 0.51% to 3,154.257

Gold was dragged lower by risk-taking and a stronger dollar, while oil prices continued to climb on speculations that the U.S. will slap sanctions on oil-producing countries like Iran, Venezuela, and Russia.

  • Gold is down by 0.19% to $1,333.67
  • Brent crude oil is up by 0.58% to $68.95
  • U.S. WTI is up by 0.79% to $63.76.

Major Market Mover(s):

Commodity-related, export-dependent economies like Australia and New Zealand would benefit greatly from a more “open” Chinese economy, so the Aussie and Kiwi rocketed like there’s no tomorrow.

AUD/USD is up by 32 pips (+0.42%) to .7727
EUR/AUD is down by 67 pips (-0.42%) to 1.5933 and
AUD/CHF is up by 37 pips (+0.50%) to .7395

NZD/USD is up by 21 pips (+0.29%) to .7327
EUR/NZD down by 61 pips (-0.36%) to 1.6803 and
GBP/NZD is down by 49 pips (-0.25%) to 1.9289

Not surprisingly, low-yielding currencies like the yen took hits when traders flocked to higher-yielding bets.

USD/JPY is up by 37 pips (+0.34%) to 107.11
AUD/JPY is up by 62 pips (+0.76%) to 82.77
GBP/JPY is up by 58 pips (+0.38%) to 151.39
CAD/JPY is up by 33 pips (+0.40%) to 84.40
NZD/JPY is up by 50 pips (+0.64%) to 78.48

Watch Out For:

  • 6:00 am GMT: Japan’s machine tool orders (y/y)
  • 6:45 am GMT: France’s industrial production (1.5% expected, -2.0% previous)
  • 8:00 am GMT: Italy’s industrial production (1.0% expected, -1.9% previous)
  • 9:30 am GMT: BOE MPC member Andy Haldane to give a speech in Melbourne