Get caught up on what’s moving markets in Asia.

Geopolitical tensions heat up again, Aussie government mulls measures to tame home price appreciation, and Xi-Trump goodwill. Here are some of the things people in markets are talking about today.

Tensions Swell

Geopolitical tensions will once again be in the spotlight on Monday after suspected suicide bombers targeted two Egyptian churches in an attack that killed more than 40 and U.S leaders shed more light on the new administration's stances on Syria and North Korea. Secretary of State Rex Tillerson said he plans to press Russia about the use of chemical weapons in Syria later this week after the U.S. missile strike on April 7, a move that drew criticism from Russia officials. The secretary also added that the U.S. isn’t interested in “regime change” in North Korea at this time even as an aircraft carrier was moved closer to the Korean Peninsula. Tillerson will meet with his G7 counterparts in Italy on Monday.

Aussie Housing Stress Builds

It’s getting increasingly difficult to afford shelter in Australia’s economic engine, which is creating political headaches for local and national lawmakers alike -- not to mention young workers who have had to put their home ownership goals on hold. The government is mulling measures to encourage new migrants to move to regional cities, rather than Melbourne and Sydney, which Immigration Minister Peter Dutton said “could bring many benefits.” At 10:30 a.m. Tokyo time, we’ll get an update on the monthly change in approved home loans for February, which are expected to remain flat.

Xi-Trump Meeting, Tweeting

Amid wide-ranging discussions in Mar-a-Lago, Florida, Trump and Chinese President Xi Jinping were able to form “tremendous goodwill and friendship,” according to the U.S. leader. Cabinet secretaries Steven Mnuchin and Wilbur Ross both stressed the need to bring about a more balanced trading relationship between the world’s two largest economies; Trump, for his part, tweeted that “only time will tell on trade.” Corporate America -- or at the very least, the head of one major automaker -- was pleased by the seemingly cordial event. Ford Motor Co. CEO Mark Fields said the meeting between Xi and Trump sets “a very firm foundation to then go off and make concrete advances to strengthen the ties between the two countries.”

Land of the Rising Exports?

Rising shipments are expected to boost Japan’s current account surplus for February to 2.5 trillion yen from 65.5 billion in January as Asian demand rebounds. Economists at Maybank Kim Eng Research in Singapore recently warned that Japan, which has the second-largest bilateral trade surplus with the U.S. (lagging only China), may soon face scrutiny from the new American administration. Other Japanese data on deck: the annual change for bankruptcies in March, as well as that month’s edition of the economy watchers survey on current conditions and the outlook.

Let's EMbark

Where will this week’s action be in emerging markets, a well-performing and beloved asset class in the first quarter? South Africa -- where sovereign debt has been rated ‘junk’ by two agencies for the first time since 2000 --  and Russia, whose disapproval of the U.S. attacks in Syria may weigh on domestic financial assets. With an April 16 referendum on the powers of President Recep Tayyip Erdogan looming, Turkish currency and debt will also be closely monitored by investors. In the U.S., appetite for emerging market equities has been intense. Even on the day when the Federal Reserve revealed most officials thought that balance sheet normalization would start in 2017, two EM products topped the leaderboard for equity ETF flows.

What we’ve been reading

This is what caught our eye over the last 24 hours.

How the Fed could roil bond markets.

On sale in China: Hedging equity volatility.

Tiny, prophetic French town sees Fillon winning election.

Chinese insurance regulatory chief under investigation.

Political change in New Zealand could alter the central bank’s mandate.

Google denies allegations of gender pay discrimination.

One of Jay Z's 99 Problems? Spotify.

Source:
courtesy of BLOOMBERG

by Luke Kawa

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