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Risk-taking was on during the Asian session, as traders priced in a lack of military action escalation in Syria and stronger Chinese import data.

  • Business NZ manufacturing index down from 53.3 to 52.2 in March
  • China’s posts 30B CNY trade deficit after 225B CNY surplus in February
  • China’s trade deficit (in USD): 5.0B vs. 27.1B surplus expected, 33.7B USD previous
  • No changes to Germany’s 0.4% CPI in March

Major Events/Reports:

China’s trade data

A report printed from China earlier today noted that the world’s second largest economy had surprisingly posted a trade deficit for the month of March.

Components of the report detailed that exports had fallen by 2.7% from a year earlier for the month. That’s a far cry from the 10.0% increase that analysts had expected and a 44.5% uptick in February! This also marks the first time the numbers slipped since February.

Fortunately, imports didn’t show the same weakness. Shipments increased by 14.4% from a year earlier, beating estimates of a 10.0% increase and February’s 6.3% improvement.

Still a pretty upbeat report for the markets, especially since the weakness in exports can be explained by a lull during China’s Lunar New Year festivities.

Of course, it also helped that the continued imports growth point to steady domestic demand and more moolah for China’s major trading counterparts.

Currency intervention from Hong Kong

The Hong Kong Monetary Authority (HKMA) confirmed that it bought 816M HKD yesterday and another 2.44B HKD against USD today after its local currency fell to its lowest trading band.

Overall risk appetite

Though there were other catalysts that moved the major assets around, it was relief over the lack of escalation in tensions in Syria that market players mostly focused on.

If you recall, all eyes were on the Donald after he threatened action against the Syrian government “within 24 to 48 hours.” Instead, the POTUS hinted in his tweet that an attack could happen “very soon or not so soon at all.”

The lack of action (read: missile strikes) brought the bulls to the yard:

  • Nikkei is up by 0.46% to 21,759.4
  • Australia’s A SX 200 is down by 0.01% to 5,822.1
  • Hang Seng is down by 0.08% to 30,807.2
  • Shanghai index is down by 0.39% to 3,167.885

Commodities were a little more mixed, with gold falling on the back of dollar demand while easing geopolitical tensions in oil-producing countries caused some traders to unwind their long oil bets.

  • Gold is down by 0.40% to $1,340.20
  • Brent crude oil is down by 0.50% to $71.78
  • U.S. WTI is down by 0.39% to $66.83

Major Market Mover(s):

AUD
China’s strong trade data and the overall risk-friendly trade environment did the Aussie good this trading session.

AUD/USD is up by 18 pips (+0.23%) to .7770
AUD/JPY is up by 24 pips (+0.29%) to 82.43
AUD/NZD is up by 34 pips (+0.32%) to 1.0541
AUD/CHF is up by 21 pips (+0.29%) to .7480

GBP
There were no fresh catalysts for the pound during the session, so it’s likely that its strength came from traders catching up to Brexit Secretary David Davis’ optimistic remarks from yesterday’s London session.

GBP/USD is up by 8 pips (+0.06%) to 1.4235
GBP/JPY is up by 21 pips (+0.13%) to 152.84
GBP/NZD is up by 25 pips (+0.13%) to 1.9311

Watch Out For:

  • 9:00 am GMT: Euro Zone’s trade balance (20.2B EUR expected, 19.9B EUR previous)