The message from Asia on Friday is that most of the region's biggest economies are massively exposed to anything resembling a trade war. Although China's iron ore and steel futures were remarkably unmoved by it all. There's also talk about the PBOC raising rates, though it shouldn't hurt yuan bonds.
But hang on, stop the press! BOJ's Kuroda has decided to inject some extra volatility into the mix late on Friday with policy exit talk. At least jobs growth in Japan is pleasing to the BOJ, although there is a notable absence of workers actually demanding pay raises from their employers. A rise in demand for USD call options may also actually help to push spot dollar-yen lower.
Investors remain cautious with Italy's election behind the corner. Following Germany's vote in September last year, it's now the Italians who are headed to the ballot box this Sunday, with the outcome expected to be even messier than Berlin's — which, incidentally, is still being pieced together by Chancellor Angela Merkel and her coalition partners. Polls have pointed to a hung parliament where no one party will gain a majority to govern alone.
Source: Bloomberg Pro Terminal
Jr Trader Alexander Kumanov
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