Forex Today: China’s Xi sends risk assets flying, focus shifts to US PPI

A major turnaround in the risk condition was witnessed in Asia this Tuesday, after the much-awaited speech from the Chinese President Xi triggered a renewed risk-on wave and lifted the demand for the risk/ higher-yielding assets at the expense of the safe-havens such as the Swiss franc, the Yen and gold.

Across the fx board, the Aussie outperformed on Xi’s softer stance on the US-China trade dispute, as he advocated global cooperation, multilateral trading system and the need to widen markets. The Kiwi followed suit amid a risk-on rally in the Asian equities and oil prices while the Yen slumped against its US counterpart and printed daily lows at 107.25.

Main topics in Asia

The US wants a UN Security Council vote on Syria Tuesday

On the heels of Trump's announcement that he is planning military action in Syria following the last round of chemical weapon attacks, the US' ambassador to the UN, Nikki Haley, has stated that she wants the UN Security Council to vote on a draft resolution from the US.

IMF: Global economy continues to strengthen on investment and trade

Comments from International Monetary Fund (IMF) Deputy Managing Director Furusawa are crossing the wires via Reuters …

China rejects US trade talks - Straits Times

China is in no mood to back down from the ongoing trade war with the US and would not engage in trade talks without a US compromise, according to The Straits Times. 

Fed's Kaplan: Too soon to determine effects of tariff threats

Chairman of the Dallas Federal Reserve Robert Kaplan spoke on Bloomberg TV today, giving his take on the current tariff environment and interest rates.

NAB business conditions index drops in March, but holds above historical average

The National Bank of Australia (NAB) business conditions index fell to 14 index points in March from the February figure of 20 basis points. The investors were expecting a drop to 17 index points.

China President Xi: Dialogue is the way to resolve disputes

Reuters reports the much-awaited remarks from the Chinese President Xi Jinping, as he speaks at Boao forum.

China President Xi: Should push for free trade

More comments crossing the wires from China’s President Xi, via Reuters, as he expresses a soft stance on the US-China trade conflict while speaking at Boao Forum.

Key Focus ahead

Today’s EU macro calendar remains absolutely quiet, with no first-tier releases to leave the fx space at the mercy of the risk sentiment. The EUR, GBP traders eagerly await the speech by the Bank of England (BOE) Chief Economist Andy Haldane for fresh trading impetus. Haldane is scheduled to speak about the role of central banks and societal inequality at the David Finch Public Lecture, in Melbourne.

In the NA session, the Canadian housing starts and building permits data will be published around the same time the US PPI data drops in. Meanwhile, the US final wholesale inventories data will be reported in the US session.

EUR/USD: China's Xi hits right notes, could put a bid under USD

The EUR/USD is still holding well above the key ascending trendline (drawn from the July 11 low and Dec. 18 low). Further, President Draghi's upbeat view on the economy despite trade-related uncertainties will likely keep aggressive EUR bears at bay.

GBP/USD poised for further gains from 1.41 if sentiment holds

The Sterling is flying solo in Tuesday's action with nothing of note on the macro calendar, though speeches from the US Fed's Kaplan and the Bank of England's (BoE) Haldane at 08:30 and 09:30 GMT respectively may shake things up. 

US: Expect a steady increase in core PPI for March - Nomura

Analysts at Nomura offer a brief preview on what to expect from today’s US Producer Price Index (PPI) slated for release at 1230 GMT.