Asian Stocks Ride French Vote Higher Again, Canadian Dollar Sinks
- Asian stocks were higher again as the French-election relief rally endures
- Worries about North Korea were shrugged off
- The Canadian Dollar buckled as the US introduced surprise lumber tariffs
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Asian stocks held up on Tuesday with investors opting to ride the relief rally at centrist Emmanuel Macron’s victory in Sunday’s first-round presidential vote for one more day. Local markets had been the first to react to this, but the strength of Monday’s Wall Street gains was more than enough to see Asia back for another go.
Japan’s Nikkei ended up 1.1%, with South Korean and Chinese stocks higher too. HSBC got a lift in Hong Kong on news that the bank has been mandated – among others – to advise Saudi Aramco on its initial public offering (IPO). This will be the world’s biggest and the advice slot has been investment banking’s hottest ticket ever since it was announced last year.
Australian and New Zealand markets were out of the game for holiday. Traders are keeping an eye on events in North Korea as a US carrier group heads for the Sea of Japan. China reportedly urged restraint in dealing with Pyongyang on US President Donald Trump when they spoke by phone Monday but, on Tuesday, North Korea’s military staged a large live-fire exercise to commemorate its founding as a US submarine docked in the South.
The Canadian Dollar was the day’s surprise currency loser, sent reeling as the US opted to levy tariffs on Canadian softwood imports. They have been part of a long-running dispute but Tuesday’s news signaled that Washington was prepared to get tough on trade even with neighbors and allies.
It was an otherwise torpid session in the Asia/Pacific foreign exchange markets. The Euro shed some of its French-election gains and the US Dollar inched up against major traded rivals. However, the economic data calendar was unusually empty, giving traders little to latch on to.
Gold prices eased back for a second straight day as investor appetite for assets perceived as havens waned. Spot prices didn’t slip by much though and were down by about 0.1% as trade wound down. Meanwhile, crude oil prices crept up after six straight sessions of losses, themselves reportedly brought on by worries that further production cuts will do little to curb market glut. Both US crude and international benchmark Brent added about 25 cents/barrel.
For the remainder of the global session investors can look forward to UK public borrowing figures, US house price data and perhaps most important of all US consumer confidence numbers for March.
--- Written by David Cottle, DailyFX Research
Contact and follow David on Twitter: @DavidCottleFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.