Bolstered by some reasonably encouraging growth data, the mood in Asia overnight has been constructive, with broad gains in the major bourses of around 1%. Both Australia and South Korea recorded better than expected employment outcomes last month; in the latter, the unemployment rate fell to 3.4% in March from 3.7% previously. In both Malaysia and the Philippines, exports soared by 15% in the most recent month. Also, Fed Vice Chairman Yellen gave her imprimatur to the Fed's highly accommodative stance (she was hardly going to say anything else, now was she?), and the Fed's Beige Book showed that all twelve regions are growing and that key indicators such as manufacturing, jobs and retail sales are showing signs of strength. Asian currencies are generally stronger overnight – the Aussie for instance is now at 1.04, up from yesterday's three-month low of 1.0226. Asia's better tone was assisted by a slightly more sanguine session in Europe. Apart from some speculation that the ECB might be prepared to re-charge its SMP to bring down Spanish government borrowing costs, there was some good news to emerge from various US companies at the commencement of the latest reporting season. Yesterday's improvement may prove to be merely a brief respite – despite the best endeavours of the Rajoy government it is clear that the Spanish economy is going backwards at a rapid rate. Europe's leaders will need to get its frequent-flyer cards ready because we can expect a lot more of those legendary late-night meetings over coming months.
Also in today's Daily Forex Brief:
- Chinese currency calm
- Will ECB be Saviour or Grim Reaper?