ASIA-PACIFIC

Equities in the region traded in the red as investors remained cautious after the recent attacks in Brussels and in light of the upcoming holidays. The Nikkei 225 lost 0.28%, the Shanghai Comp was weighed down by sub-par earning data to finish at -0.49%, while the ASX 200 lost 0.47% after commodities took a dip in price.

The session saw choppy trading in the JPY as it weakened slightly after the BOJ confirmed Sakurai as the replacement for outgoing member Shirai. Sakurai is expected to be more in favour of easing as opposed to Shirai and will see BOJ Gov Kuroda better supported and the JPY weaker in the coming months.

The AUD/USD strengthened as the ANZ report dropped its RBA rate cut forecasts, now seeing the Bank on hold till the end of 2017. However, gains could not be held by the commodity-linked currency and bulls lost ground to sliding commodity prices.

The NZD Trade Balance figure is the data of note out of the region tonight, expected at 75 M, higher than last month’s 8 M figure.

USA

US equities started the session with heavy losses as risk off sentiment reigned supreme in the wake of the terror attacks in Belgium, but the sentiment soon wore off as the indexes were lifted by star performances by APPLE and the pharmaceutical sector, which saw mixed closing of the indexes. The DJIA lost 0.23%, the S&P 500 lost 0.09% and the NASDAQ gained 0.24%.

Data expected out of the US today is relatively light with New Home Sales taking the foreground, expected at 512K, a slight uptick from the last release of 494K.

UK

The Pound continues to be weighed down by the possibility of a BREXIT as polls have 43% of Brits voting to leave vs the 41% wanting to stay. Disappointing CPI data, which showed CPI mm and yy, missing expectations at 0.2%vs0.4% and 0.3% vs 0.4%, respectively, has added to the pain and GBP bears are looking for further downside as a rate hike seems further and further away.

COMMODITIES

Oil prices declined overnight as crude traded below $41 in the face of a stronger USD and larger build up as reported by the API Inventories release. Today’s US Inventories data will see some volatility as markets readjust their positions to the US stock pile. A stockpile larger than expected will see crude weaken as over supply fears continue.

Gold has returned to its pre FOMC levels below 1240 in last night’s trade as the USD has firmed in recent trade, bucking any risk off buying that would usually accompany yesterday’s terror attack.