US cash equity markets rallied off the earlier lows in the latter stages of trade to end the session mixed. Stocks earlier moved to the upside but the moved proved short lived as the potential fallout from Gary Cohn’s resignation continued to hamper investor sentiment. Declines in oil prices weighed with US crude futures settling at $61.15 (-$1.45) despite a smaller-than-expected build in US crude inventories. In the FX markets, the US Dollar index posted a small gain at the close after easing back off earlier highs following comments from White House Press Secretary Sanders who said on the basis of national security, there will be potential tariff exemptions for Canada and Mexico. Both the Canadian Dollar and the Mexican Peso caught a bid on the headlines. Meanwhile, a White House official said US President Trump will hope to sign tariffs on steel and aluminium on Thursday afternoon, but could possibly happen Friday. In fixed, Treasuries ended the session higher. Elsewhere, the Fed’s Beige book noted persistent tightness in the labour market across the country and prices increased in all Fed districts. On the data front, US consumer credit came in lower than expected at $13.91 Bln (f/c +$17.90 Bln) in January.
Before the open in Asia, New Zealand’s manufacturing sales volume climbed 1% q/q in Q4. In geopolitical news, South Korean media outlet Chosun reported that North Korea is to offer a conditional halt to its ICBM programme.
After news broke of potential exemptions to US tariffs, Asian bourses ascended. The gains came after the Washington Post reported that US President Trump is to offer exemptions for Canada and Mexico. Meanwhile, Chinese Foreign Minister Wang Yi said all sides will be harmed by a trade war, adding in the event of a trade war, China will make a necessary response. On North Korea, Wang Yi called on North Korea and the US to have talks as soon as possible, adding on the Korean peninsula, peace must prevail. Investors were also digesting Chinese trade data for February which blew past expectations, the balance surplus unexpectedly widened to $33.74 Bln (f/c -$5.7 Bln) due to a huge beat on exports, up 44.5% (f/c +11.0%) y/y, while imports rose 6.3% (f/c +8.0%) y/y. On the data front elsewhere, Japanese GDP surpassed forecasts in Q4, rising a SA +0.4% (f/c +0.2%) q/q and 1.6% (f/c +1.0%) y/y, while nominal SA rose 0.3% (f/c +0.1%) q/q and deflator up 0.1% (f/c 0.0%) y/y. Japan’s BoP current account balance and adjusted balance posted larger than expected surpluses in January of +¥607.4 Bln (f/c +¥437.4 Bln) and ¥2022.6 Bln (f/c +¥1761.9 Bln), respectively. The data prompted little reaction the Japanese Yen. Down under, Australia’s trade balance widened to A$1055 Mln (f/c +A$160 Mln) in January with imports falling 2% m/m and exports rising 4% m/m. In Europe, the UK’s RICS house price balance fell to 0% (f/c +7%) y/y in February, its joint lowest since March 2013. In cryptocurrency news, Japan’s Financial Regulator announced punishments for cryptocurrency exchanges with the FSA ordering the suspension of business at some exchanges and issued a business improvement order to Coincheck and six alternate exchanges. On the headlines and recent volatility in the cryptocurrency, Bitcoin prices moved lower.
Looking ahead, at 05:30 GMT, we get Dutch CPI, followed by Swiss unemployment at 06:45 GMT. Next at 07:00 GMT, we get German factory orders & industrial production and Norwegian industrial production, followed by BoF industrial sentiment at 07:30 GMT. Then at 08:00 GMT, we get Spanish house price index, followed by Norwegian outlook report at 08:45 GMT and Greek unemployment at 10:00 GMT. Also of note, the Riksbank open forum and possible comments from Swedish Finance Minister Andersson at 07:00 GMT, while Ireland sells 2022 & 2028 notes at 10:10 GMT