Analysts at TD Securities are looking for the Canada’s manufacturing sales to rise by 1.6% (market: 1.5%) in March on a pickup in auto production and higher factory prices, which should see the volumes come in below the nominal print. Key Quotes “The Bank of Canada will release its Financial System Review at 10:30 ET, which will be followed by a press conference with Governor Poloz and Senior Deputy Governor Wilkins at 11:15 ET. Coming one week after Poloz's speech on the future of the mortgage market, we suspect the Bank will have little to say beyond an update on the effect current macro prudential rules and recent developments in the housing market.”

The leader of House of Commons, Andrea Leadsom, crossed the wires in the last minutes saying that the Withdrawal Agreement bill will be introduced as soon as possible to give lawmakers time to consider it. Leadsom's comments were largely ignored and the GBP/USD was last seen down 0.18% on the day at 1.2826.

10-year US T-bond yield rebounds from multi-week lows. US Dollar Index stays directionless near mid-97s. Coming up: Weekly jobless claims, housing starts and building permits data from the U.S. The USD/JPY pair came under a modest pressure during the Asian session on Thursday as reports of the U.S. banning Chinese tech-giant Huawei escalated, once again, the geopolitical tensions. After slumping to 109.30 area and moving in a tight range near that level, however, the pair gained traction in the last hour and turned positive on the day. As of writing, the pair was up 0.08% at 109.67. The 10-year US Treasury bond yield, which slumped to its lowest level since late March at 2.340% earlier in the day, also took advantage of the slightly-improved market sentiment and turned positive on the day to help the pair push higher. Moreover, major European equity indexes are posting gains in the day, confirming the risk-on atmosphere. Similarly, the S&P 500 Futures is adding 0.3% to point to a p..

British Prime Minister Theresa May's spokesman crossed the wires in the last minutes saying that there will be more talks with the opposition Labour party on Brexit at an official level in coming days. When asked about Huawei, the spokesman said that they were reviewing the right policy on 5G and added that they will make an announcement when ready.

Oil boosted by rising supply concerns amid escalating Middle-East woes. Uncertainty over OPEC supply cuts extensions, swelling US crude stocks to cap gains? WTI (futures on Comex) picked-up bids in the European session and clinched fresh three-day tops at 62.68 levels before receding slightly to now trade near 62.40 region. Despite the latest retreat, the sentient around black gold remains buoyed amid mounting supply disruption concerns, as the Middle-East tensions intensify alongside heightening US-Iran rift. The supply risks continue to overshadow the rising fears over the US-China trade war and remain oil-supportive. “An attack on four oil tankers in the Gulf on Sunday, for which no one has claimed responsibility, and Saudi Arabia’s announcement that armed drones hit two of its oil pumping stations, have compounded concerns have stoked supply-side fears”, as reported by Reuters. However, markets remain wary over the swelling US crude inventories and OPEC’s plan of supply cut ex..

According to analysts at TD Securities, US housing starts are expected to recover to 1,209k in April (+6.2% m/m) following two consecutive monthly declines that brought starts lower from 1,298k in January. Key Quotes “Recent weakness has mostly been driven by a soft showing in starts in the single family segment.” “Separately, the Philly Fed survey is expected to show a minor improvement in manufacturing activity to 9.0 following a -5.2 decline to 8.5 in April. This will be the second look on the manufacturing sector for May after the stronger-than-expected increase in activity reported by the NY Empire survey.”

According to analysts at Westpac, after the Trump administration ameliorated market concerns over mounting trade tensions by intimating that trade negotiations could still progress with hopes for a Trump-Xi meeting at G20 in late June, but the ratcheting up of tariffs on Chinese goods and retaliatory actions from China have materially hardened the dialogue. Key Quotes “Markets are now likely to focus on the FOMC’s minutes and their detailing of low inflation being transitory while they are also reviewing the Fed’s policy tools and framework given the low r-star environment as outlined in recent speeches.” “After a period of mixed data releases, the series of regional Fed surveys may provide more timely assessments of activity, though the impact of trade tariffs and the dent to global sentiment will take more time to become evident.” “USD should consolidate into the FOMC minutes.”

The cross stays under pressure below the 123.00 handle. US-China trade, Italy remains as key drivers for risk trends. EMU trade surplus widened to €22.5 billion during March. EUR/JPY is alternating gains with losses on Thursday following the improved mood around the European currency and the sidelined pattern in the Japanese safe haven. EUR/JPY attention to trade, risk appetite The cross has accelerated the leg lower in the last sessions and is currently transiting the second consecutive week with losses, always tracking the broader risk appetite trends. In fact, renewed concerns on the US-China trade front have sparked strong inflows into the Japanese safe haven and thus forced the cross to recede from the area near the 200-week SMA beyond 126.00 the figure seen in mid-March to yesterday’s lows near the 122.00 milestone/ In the data space, EMU trade surplus surprised to the upside in March and widened to €22.5 billion. Later in the session, the Eurogroup meeting should kick in ..

The UK opposition Labour Party Brexit spokesman Starmer is on the wires now, via Reuters, noting that his party will vote against the UK PM May’s withdrawal agreement bill unless a deal with the government is reached before. No further comments are out by Starmer. Earlier today, Reuters reported comments from Labour Party’s Foreign Affairs spokeswoman Emily Thornberry, as she also said that her party will vote against Prime Minister Theresa May’s Brexit deal and will not abstain in the Brexit vote.

• Signs of stability in the global financial markets extend some support. • A modest USD pullback prompted some intraday short-covering move. • Traders now eye second-tier US economic releases for fresh impetus. The NZD/USD pair reversed an early dip to one-week lows and rallied around 40-pips, hitting fresh session tops during the early European session. With investors still digesting the recent escalation in the US-China trade tensions, some signs of stability in global financial markets extended some support/helped ease the bearish pressure surrounding perceived riskier currencies - like the Kiwi. This coupled with a modest US Dollar pullback, led by persistent weakness in the US Treasury bond yields might have acted as another factor prompting some aggressive intraday short-covering move and behind the latest leg of an upsurge. It, however, remains to be seen if the uptick is backed by any genuine buying or is still seen as a selling opportunity at higher levels as the market ..

According to analysts at NAB, global financial markets had been recovering strongly from the turbulence of late last year, aided by a dovish turn in the direction of monetary policy, but have given up some their gains following the latest round of US-China tariff increases. Key Quotes “There have been some signs of activity stabilising –Q1 GDP in some major economies was either stronger or unchanged, and the global composite PMI has basically moved sideways this year.” “While a fading impact from last year’s fiscal stimulus is one factor likely to contribute to a slowing in US growth over the rest of the year, fiscal policy in other advanced economies and emerging economies has turned more supportive. Combined with still low policy interest rate settings by many central banks, this should help support growth.” “However, our leading indicator of global activity continues to point to a slowdown in growth. Given this, and the flare up in the US-China trade dispute last week, we have l..

Analysts at ANZ note that the Bank Indonesia (BI) has unsurprisingly kept its 7-day reverse repo rate unchanged at 6.00% today. Key Quotes “More interestingly, its statement and press conference finally hinted that rate cuts may be considered amid lacklustre growth and benign inflation. Nonetheless, the timing of any cuts will be dependent on global financial market conditions.” “Unless market sentiment materially improves in the coming weeks, the odds are that BI will opt to be patient and make its move only in the second half of this year.”