Daily Observations:

Financial markets were momentarily rocked after the US launched a missile attack on Syria earlier today, as geopolitical concerns sent investors rushing for haven assets. The Japanese yen and gold climbed with oil, while the 10yr Treasury yield briefly fell below 2.30%.


  • The US launched a cruise missile attack against Syria earlier today, 2 days after Bashar al-Assad’s regime used poison gas to kill scores of civilians, an act that drew international condemnation and that US President Trump called “an affront to humanity”.
  • Initial jobless claims for the week ended 1 April fell to 234,000 – a 5-week low, from 259,000 the week prior, and lower than the 250,000 figure expected. Economists generally consider weekly filings below 300,000 as consistent with a healthy labor market. The data, which has been volatile recently, come a day before the monthly payrolls report that is projected to show the addition of 180,000 workers in March following a 235,000 increase in February.
  • US President trump began his first-ever meeting with Chinese President Xi Jinping yesterday, marking the first real test of Trump’s campaign promises to win negotiations with America’s chief economic and military rival. After defeats on hi travel ban and the Obamacare repeal, Trump wants to show progress countering North Korea’s nuclear threat and opening Chinese markets to more US goods.
  • The US dollar strengthened overnight, with the Bloomberg Dollar Spot Index firming 0.2% in New York, before paring 0.1% earlier today following news of a US-led missile attack on Syria.
  • The benchmark 10yr Treasury yield earlier today declined 5bps to 2.29% – its lowest since last November, as a flight to safety drove demand for safe haven assets such as US Treasuries.
  • US equities pared earlier gains but still managed to end last night’s session in the green as investors remained cautious ahead of nonfarm payrolls data later today. The S&P 500 Index ended 0.2% higher, led by energy shares.


  • Canada’s ambassador to the US, David MacNaughton, and former Prime Minister Brian Mulroney briefed lawmakers and touted potential gains for both Canada and the US in updating the North America Free Trade Agreement. MacNaughton predicted potential harm to US consumers from a border-adjustment tax would deter the administration from imposing one, while Mulroney said talks can be successful even if they result in significant updates. Both agreed that Canada should be ready to make its own demands.


  • ECB President Mario Draghi has said there is no need to deviate from the original wording regarding forward guidance, as there is no sufficient evidence to alter the committee’s outlook on inflation.


  • London posted the fastest drop in supply of workers in 15 months, according to a monthly survey by IHS Markit and the Recruitment & Employment Confederation. Nationally, firms also reported difficulty in getting workers, particularly in finance and information technology, resulting in full-time starting salaries rising “sharply”.


  • S&P Global Ratings pulled the first ever downgrade of a Chinese local-government financing vehicle (LGFV) Thursday, citing the city in eastern Jiangsu province’s high debt burden. Concern Beijing is trying to wean local bodies off support is quelling demand for the debt, with the yield premium on LGFV notes versus company bonds swelling to near the most since March 2014.
  • The funding vehicles have 5.5 trillion yuan of bonds outstanding, of which about 888 billion yuan matures this year, according to data compiled by Bloomberg.

Precious Metals:

  • Spot gold rallied 1.4% to $1,269.46/Oz on the back of safe-haven buying among investors earlier. A convincing break above the metal’s 200-day average of $1,259/Oz should propel the yellow metal higher to the psychological $1,300/Oz handle over the medium term.
  • Silver for immediate delivery gained 1.4% to $18.4790/Oz. A break above the $18.50/Oz may drive the metal to its next resistance of $19/Oz.


  • Crude oil futures expiring in May rallied 1.9% to $52.70/bbl earlier today, its highest level in a month, after the US launched a cruise missile attack against Syria this morning.
  • US President Trump is preparing to issue an executive order with the goal of giving oil companies more opportunities to drill offshore, reversing Obama-era policies that restricted the activity. The directive is set to be issued soon, Interior Secretary Ryan Zinke said yesterday.


  • Spot 1.4025
  • USDSGD rose 0.2% to 1.4035 and looks poised to close higher for a seventh consecutive session.
  • Having rebounded off its 200-day moving average last week, the pair has since gradually edged higher, regaining above its 1.4000 handle.


  • Spot 0.7527
  • The Aussie extended its bearish momentum against the greenback for the second straight session, following broad risk-off sentiment earlier today. The pair fell 0.5% to 0.7517, breaking past its 200-day moving average for the second time in a month.
  • A break below the key 0.7500 will probably drive the pair lower to the 0.7300 region, last traded in early January.



  • Spot 1.3405
  • USDCAD declined 0.3% to 1.3397, on the back of stronger crude oil prices today. Further crude oil strength could drive the pair back to the 1.3300 handle.


  • Spot 6.8734
  • The PBOC earlier kept its yuan fixing rate little changed at 6.8949 to the US dollar.
  • USDCNH gained 0.2% to 6.9006 before a technical rebound off the 6.9000 handle saw the pair pare some of its gains.


  • Spot 110.60
  • Increased flows into safe-haven assets such as the yen drove the USDJPY 0.7% to 110.13 earlier today, as the currency pair tested its 110 key support. The last time the pair traded below 110 was back in Nov. 18.


  • Spot 1.2465
  • GBPUSD remained little changed as the pair continued to be capped below the 1.2500 handle.
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UEN: 201419754M

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