Market wrap: safe haven JPY weakened - Westpac

Analysts at Westpac offered a market wrap, noting the hopes for peace headlines that boosted risk appetite. 

Key Quotes:

"The Korean won jumped >1%, while safe haven JPY weakened. AUD/USD bounced 1% to 0.7840 before easing back to 0.7820 in NY trade. US equities and bonds were less impacted. Australia's calendar features Q4 GDP data and a speech by RBA governor Lowe. US data includes Feb ADP private payrolls while the Bank of Canada is expected to hold policy steady."

"AUD/USD sprang to life, surging from 0.7765 to a high of 0.7842 before spending much of NY trade either side of 0.7820. Outperformer NZD had been edging higher before the Korean headlines and added another 60 pips to 0.7311, ignoring the modest slippage in GDT dairy prices at auction. AUD/NZD thus slipped about 0.2% to 1.0720."

"The Japanese yen underperformed on the Korean news, though not for very long. USD/JPY had been grinding down to 105.90 when the headlines prompted a jump to 106.40, later steadying around 106.10. EUR/USD reacted as well, bouncing from 1.2345 to 1.2410/20, with European news flow light."

"GBP/USD rose 0.3% over the day, to 1.3900, with some of the gains on the Korea bounce. USD/CAD narrowly avoided 1.3000, rolling over to the high 1.28s. CAD recovery seems to be premised on President Trump not imposing the threatened steel and aluminium tariffs. Republican Senate majority leader McConnell expressed his opposition to the plan and news reports claimed White House economic adviser Cohn would quit if the tariffs went ahead."

"The Korean news may have helped US equities open higher but their mood was mixed thereafter. US 10yr treasury yields paid little attention, ranging sideways between 2.86% and 2.90%, while 2yr yields ranged between 2.22% and 2.26%. Fed fund futures continued to price three more hikes by end-2018 (with March highly likely), and another in 2019."