Not only the US but China have also stepped forward while conveying brighter chances of a trade deal. G20 will gain major market attention while US GDP can also be observed for near-term directives. While late-Wednesday’s trade positive comments from the US Treasury Secretary Steve Mnuchin initially pleased the Asian share buyers, statements favoring the odds of the US-China trade deal by the Chinese media offered additional strength to market optimists and extended the stock momentum to the north during early Thursday. With the rising hope of a trade deal between the world’s two largest economies, MSCI’s index of Asia-Pacific shares ex-Japan is up 0.89% whereas Japan’s Nikkei gains 0.84% by the press time. China’s Hang Seng marks more than 1.13% while India’s BSE Sensex also cheers the US secretary of state Mike Pompeo’s visit despite trade/defense differences with the world’s biggest economy. Australia’s ASX 200 seems cold-blooded to the trade news/China’s upbeat industrial prof..

TD Securities analysts note that New Zealand’s Business Activity and Confidence fell in June as the confidence index fell to -38.1 from -32.0 and the Activity outlook gauge dipped to 8.0 from 8.5. Key Quotes “Inflation expectations edged higher to 1.87% from 1.81% while most activity indicators were little changed, remaining at relatively weak levels. Residential building intentions "continue to suggest a marked fall in building activity'' and a net 12% of firms in the construction sector are intending to cut jobs.”

Aline Schuiling, senior economist at ABN AMRO, points out that the France and Germany published consumer confidence data yesterday which showed that the Germany’s first estimate of confidence in July fell to 9.8, down from 10.1 in June while France’s consumer confidence increased to 101 in June, up from 99 in May. Key Quotes “Actually, confidence amongst French consumers has risen non-stop in every month since the start of the year, whereas in Germany consumers have become more gloomy almost non-stop during this period. An important reason for this divergence seems to be that the German economy is much more exposed to the decline in global trade and the uncertainties related to the global trade conflict than France’s.” “The share of exports to countries outside the EU in Germany’s GDP (approximately 16%) is around twice as high as that of France. Indeed, Germany’s exports growth has slowed much more sharply than France’s export growth since the start of 2018. Consequently, overall G..

The Bank of Japan (BOJ) board member Wakatabe is back on the wires now, via Reuters, noting that there is no immediate need to review the BOJ policy framework. He added that he sees no need to change the target range for the 10-year yield. Further Comments: We may pre-emptively and take action if the board can agree it will be hard to achieve the 2% inflation target.

CME Group’s flash data for JPY futures markets showed open interest rose for the third session in a row on Wednesday, this time by around 1.6K contracts. Volume, instead, went down by almost 38/9K contracts. USD/JPY now targets monthly peaks at 108.80 USD/JPY has reversed the recent pessimism and started a correction higher sustained by rising open interest in tandem with declining prices in the Japanese safe haven. The shift in sentiment around the US-China trade front is mainly collaborating with the up move, while the squeeze higher carries the potential to test monthly tops in the 108.80 area.

Forex today in Asia cheered a renewed risk-on wave, fueled by the reports that the US-China have reached a tentative trade truce, as markets await the G20 Summit. The anti-risk slipped across the board while the safe-haven Gold traded on the back foot below 1410 levels. The USD/JPY pair popped the 108 handle while the AUD/USD pair extended the upside to 0.70 handle. However, the further upside was limited by the resurgent US dollar demand across the board, in the face of trade optimism that would ease the Fed rate cut expectations. The Treasury yields also traded firmer, leaving the EUR/USD and the Cable under pressure. The Kiwi consolidated the gains below the 0.67 handle amid negative oil prices. The Swiss franc suffered heavy losses, as the USD/CHF pair rallied above 0.9800 on a better sentiment towards the risk assets. Main Topics in Asia Turkish President Erdogan: US President Donald Trump is considering a visit to Turkey in July – Nikkei Brexit: Remainer rebel MPs to mount a ..

Open interest in GBP futures markets rose by around 1.8K contracts on Wednesday according to advanced figures from CME Group. On the other hand, volume shrunk by nearly 25.1K contracts amidst erratic performance. GBP/USD upside capped above 1.2700 Cable is extending the sideline theme below 1.2700 the figure so far today. The continuation of the current pattern in prices is likely on the back of unclear trends in both open interest and volume.

ANZ analysts note that the New Zealand’s headline business confidence reversed May’s lift, down 6 points to net -38% in June’s ANZ Business Outlook. Key Quotes “Firms’ views of their own activity fell just 1 point to +8%. Other activity indicators were also fairly steady.” “Inflation indicators were mixed: pricing intentions fell, reported cost pressures were unchanged, and inflation expectations lifted slightly.” “Residential construction intentions bounced. However, the construction sector has the weakest employment and profitability intentions across the economy.”

In light of preliminary figures from CME Group, investors trimmed their open interest positions by just 413 contracts on Wednesday while volume shrunk by around 60.1K contracts, extending the choppy performance seen as of late. EUR/USD comes under pressure near the 200-day SMA EUR/USD appears on the defensive following the indecisive price action on Wednesday and the bearish ‘outside day’ charted the earlier in the week. Declining open interest and volume amidst unclear direction in prices leaves the door open for some near term consolidation although odds for a deeper correction remains well on the cards.

Overbought RSI limits the EUR/GBP’s capacity to rise past-monthly top. An upward sloping trend-line since early-May limits near-term declines. Failure to grow much beyond the monthly high, coupled with overbought levels of 14-day relative strength index (RSI), drag the EUR/GBP pair presently down to 0.8952 heading into the European open on Thursday. Having said that, a 7-week old support-line at 0.8926 gains sellers’ immediate attention, while the 21-day exponential moving average (21-D EMA) at 0.8894 and 61.8% Fibonacci retracement of January to March dip around 0.8870, may please the bears afterward. In a case where prices keep trading southwards past-0.8870, February month top near 0.8842 and 50% Fibonacci retracement level at 0.8794 may come back on the chart. It should, however, be noted that the quote’s successful rally beyond 0.8975/77 area, including latest tops, can flash 0.9000 for buyers whereas 0.9060 and 0.9120 can please them during further advances. EUR/GBP daily c..

Standard Chartered analysts point out that India’s final budget for FY20 (year ending March 2020) will be presented on 5 July by Nirmala Sitharaman, the country’s first full-time female finance minister. Key Quotes “The new government faces several challenges in delivering the budget: (1) increasing calls for fiscal stimulus in a slowing economy; (2) an already-wide fiscal deficit, accounting for off-balance-sheet spending; (3) a lack of clarity on the growth impact of the fiscal stimulus announced in the interim budget in February 2019 (amounting to c.0.5% of GDP and not yet fully implemented); and (4) the pending report by the Jalan Committee on the appropriate economic capital framework for the Reserve Bank of India (RBI), which may have fiscal implications.” “Given that monetary policy is already accommodative, we believe sticking to existing fiscal targets would be most beneficial course of action for the economy in the short and long term.” “We expect the government to mainta..

Dominick Stephens, chief economist at Westpac, notes that the New Zealand’s business confidence fell in June, and remains close to the very low levels it reached shortly after the election of the Labour-led Government in late-2017. Key Quotes “Firms' impression of their own business activity levels fell only slightly. Activity responses in the survey have hovered about these low levels since the last election.” “We had expected that business confidence would lift a little in the wake of the Government's decision to cancel capital gains tax, but that has not happened. It is difficult to discern much signal from this survey given that it carries such an obvious political bias. But we have noticed that actual business investment and hiring decisions have cooled recently, so low business confidence really has impacted the economy. Today's data gives little hint that that situation has changed.” “Turning to actual economic activity, the detail in the survey did improve sl..