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The mood across Asian markets improved this morning, amid easing concerns about the global economy and a possible recession in the United States.

Market participants are easing up on the risk-off sentiment, with most Asian currencies appreciating against the Dollar, while the Yen is slightly weaker. Although there appears to be some semblance of stability returning to financial markets, the geopolitical risk factors weighing on investor sentiment remain ever present.

We will be closely monitoring whether a sustained selloff ensues across risk-on assets over the mediumterm. Emerging market assets may receive a welcome boost if stimulus measures out of European and Chinese governments start to take hold and reflect in the respective economic indicators. Until that happens, markets will remain on edge as they contend with more immediate-term headwinds, such as the ongoing US-China trade negotiations and Brexit.

UK Parliament takes the wheel

The British Pound stuck around the 1.32 handle on Tuesday morning, after the UK Parliament seized control of the Brexit process from Prime Minister Theresa May.

While Westminster is now in the driving seat, it has to decide which path to take. Among the alternatives reportedly being considered: a softer Brexit, a no-deal Brexit, a second referendum, or even cancelling Brexit altogether.

UK lawmakers must arrive at an agreed course of action by April 12 and the plan also needs to be palatable to the European Union's 27 member countries. All these seemingly unending twists and turns only serve to ensure that the Pound remains highly sensitive and volatile as Brexit uncertainties intensify in the near-term.

With a series of votes on Brexit alternatives being scheduled, higher chances of a deal that secures the UK's exit from the EU, if at all, is likely to lift Sterling higher. Should markets deem that the odds of a cliff-edge Brexit are on the rise, that could send GBPUSD back to the lower end of the 1.30-1.33 range.

• Rates: Global 10-yr yields fall below key levels
  Disastrous EMU PMI's pushed the German 10-yr yield into negative territory for the first time since October 2016, while the US 10-yr yield broke through key support of 2.50%. Today's German IFO Business sentiment will likely confirm Friday's PMI's. Risk off remains today's sentiment, setting core bonds up for more gains.
• Currencies: Poor EMU data and global risk-off are weighing on the euro
  Fears on global growth dominated global (FX) trading on Friday. Poor EMU PMI's pushed the euro off a cliff. However, US yield curve moves also suggests investor uncertainty on US growth. The euro remains vulnerable to negative news (e.g from today's Ifo), but we don't expect a break of the 1.12 area. Keep a close eye at the 124.30/123.40 EUR/JPY support area.

The Sunrise Headlines

• US stocks slid on global growth concerns Friday undoing all post Fed gains. The Nasdaq underperformed (-2.50%). The equity selloff rolls into Asian markets, with Japan significantly lagging its peers (3%).
• Special counsel Robert Mueller found no evidence of president Trump colluding with Russia to win the 2016 election. Regarding the investigation on obstruction of justice, Attorney General Barr concluded that the evidence “is not sufficient”.
• Spain's Socialist party increased their lead in the run-up to the April 28 elections, according to a freshly concluded poll. Sanchez' party would still fall short of a majority however, as would a coalition of the three right-wing parties.
• China's industry minister Miao said the direct government intervention in the industrial sector will gradually be reduced. His comments came days ahead of a new round of high-level trade talks starting in Beijing on Thursday.
• Chicago Fed Evans understands markets are nervous about the US10y and US3m curve inversion but added the US eco outlook is solid. Evans considers current interest rates neutral and expects no hike until the second half of 2020.
• Italy's Five Star Movement remains the top-voted party in Basilicata's local elections but its support slid considerably compared with last year. League surged but the vote won't affect the stability of the government, PM Conte said.
• Economic data is scant at the start of this week. We watch for Germany's IFO confidence. Fed's Harker is scheduled to speak, marking the start of this week's avalanche. UK parliament votes to take control of the agenda for one day

Currencies: Poor EMU Data And Global Risk-Off Are Weighing On The Euro

Growth fears weighing more on euro than on USD

Last week both the dollar and the euro faced headwinds as investors pondered mounting signs of a global growth slowdown. On Wednesday, the Fed cemented its await and see bias, taking time to assess incoming eco data and sending the dollar substantially lower. However, on Friday the euro also fell off a cliff. Awful EMU PMI's confirmed the scenario of a regional and global slowdown. The euro was hammered but the EMU PMI's also triggered a global risk-off repositioning. EUR/USD dropped and (more than) reversed the post-Fed rally. EUR/USD closed at 1.1302 (from 1.1374). The yen attracted safe haven flows. USD/JPY declined to close at 109.92. EUR/JPY finished at 124.24, testing a key support area. This morning, Asian markets are also hit hard as fears on a growth persist. The Mueller report removing some uncertainty on the political fate of US President Trump and hope a further progress on the China US trade talks currently can't alleviate fears on growth. Chicago Fed Evans wasn't that negative on the US economy. Still, US yields stay close to last week's low levels. The major currency cross rates consolidate Friday's repositioning. The yen stays strong. USD/JPY hovers in in the 110 area. EUR/USD struggles not to fall back below the 1.13 handle.

Today, FX markets will focus on pointers for growth. In the US, the Chicago Fed activity index and Dallas Fed manufacturing activity will be published. However, the German IFO business climate will take centre stage. Will the negative PMI's from Friday be confirmed? The reaction to IFO will probably be more muted than after Friday's PMI's. Markets are uncertain on global growth, but the euro is probably more vulnerable to more bad news compared to the dollar. We also keep a close eye at the EUR/JPY technical chart. The pair dropped below the 124.38 neckline and a sustained drop below 123.40 might have (profound) consequences for other euro cross rates. On Friday, the euro upside potential was blocked. EUR/USD remains in the 1.12/1.15 trading range. We still assume no outright break of this range but a downside test is becoming more likely, if EMU data disappoint or global risk sentiment deteriorates further. The EUR/GBP declined in lockstep with the post PMI overall decline of the euro Friday. This weekend, headlines indicated that the political process of managing Brexit might be heading to an outright chaos. The political survival of PM May is also again at stake. Sterling is losing modest ground (EUR/GBP 0.8580 area). Last week's EUR/GBP decline was euro weakness. We don't see a reason for sterling outperformance if Brexit uncertainty persists

EUR/USD: holding in the 1.12/1.16 range. As risk aversion and worries on global growth persist, EUR/USD risks have tilted to the downside

Daily Pivots: (S1) 1.3385; (P) 1.3415; (R1) 1.3431; More...

USD/CAD lost upside momentum ahead of 1.3467 resistance. Intraday bias is turned neutral with 4 hour MACD crossed below signal line. On the upside, firm break of 1.3467 resistance will reinforce the case that corrective pull back from 1.3664 has completed at 1.3068. USD/CAD should then target a test on 1.3664. On the downside, break of 1.3352 minor support will turn intraday bias back to the downside for 1.3250 support first.

In the bigger picture, structure of the medium term rise from 1.2061 (2017 low) to 1.3664 is not clearly impulsive. Hence, we'd stay cautious on strong resistance from 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685 and 1.3793 resistance to limit upside, and bring medium term topping. But in any case, medium term outlook will stay bullish as long as channel support (now at 1.3192) holds. Sustained break of 1.3793 will pave the way to retest 1.4689 (2015 high). However, firm break of the channel support should confirm reversal and target 1.2061 low again.

Daily Pivots: (S1) 0.7080; (P) 0.7098; (R1) 0.7132; More...

Outlook in AUD/USD remains unchanged and intraday bias stays neutral. On the downside, break of 0.7056 minor support will turn bias to the downside for 0.7003 first. Break will resume the whole decline from 0.7295. On the upside above 0.7168 will resume the rebound from 0.7003 towards 0.7295 high instead.

In the bigger picture, as long as 0.7393 resistance holds, we'd treat fall from 0.8135 as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 (2016 low) will confirm this bearish view and resume the down trend to 0.6008 (2008 low). However, firm break of 0.7393 will argue that fall from 0.8135 has completed. And corrective pattern from 0.6826 has started the third leg, targeting 0.8135 again.

Daily Pivots: (S1) 109.71; (P) 109.97; (R1) 110.23; More...

With 4 hour MACD crossed above signal line, intraday bias in USD/JPY is turned neutral for some consolidation above 109.71 temporary low. Further decline is expected as long as 110.95 minor resistance holds. Below 109.71 will target 38.2% retracement of 104.69 to 112.13 at 109.28. Break of 109.28 will target 61.8% retracement at 107.53 next. On the upside, break of 110.95 minor resistance will turn bias back to the upside for retesting 112.13 instead.

In the bigger picture, while the rebound from 104.69 was strong, USD/JPY failed to sustain above 55 week EMA (now at 110.91), and was kept well below 114.54 resistance. Medium term outlook is turned mixed and we'll wait for the structure of the fall from 112.13 to unveil to make an assessment later. For now, more range trading is expected between 104.69 and 112.13 first.

Daily Pivots: (S1) 0.9906; (P) 0.9928; (R1) 0.9947; More.....

Intraday bias in USD/CHF remains neutral for the moment and more consolidation could be seen above 0.9879 temporary low. As long as 1.0010 minor resistance holds, further decline is mildly in favor. On the downside, below 0.9879 will resume the fall from 1.0124 to 0.9716 key support. Nevertheless, break of 1.0010 will turn bias back to the upside for 1.0124/28 resistance zone.

In the bigger picture, focus is back on medium term trend line (now at 0.9846). Decisive break there will argue that whole rise from 0.9186 has completed. Further break of 0.9716 will confirm reversal and target next support level at 0.9541. Nevertheless, there is still a chance that price action from 1.0128 are forming a consolidative pattern with fall from 1.0124 as third leg. If this is the case, stronger support should be seen between 0.9716 and the trend line to contain downside.

Bitcoin is coming under slight selling pressure on Tuesday after buyers failed to build bullish momentum above the $4,000 resistance level. The BTCUSD pair is testing Ichimoku cloud support on the four-hour time frame, with the $3,850 level major weekly support below. Bulls need to move price above the Kijun-Sen line, around the $3,975 level in order to regain bullish momentum.

The BTCUSD pair is only bullish while trading above the $3,850 level, key technical resistance remains at the $3,975 and $4,240 levels.

If the BTCUSD pair moves under the $3,850 level, sellers may test towards the $3,700 and $3,630 support levels.

The US dollar is once again trading testing the 110.00 level against the Japanese yen as global equity markets come under downside pressure. The USDJPY pair has a strong bearish intraday bias while trading below the 110.30 resistance level. The 109.10 level now offers the strongest form of support below the pairs former weekly trading low.

The USDJPY pair is bearish while trading below the 110.30 level, key support is found at the 109.10 and 108.80 levels.

If the USDJPY pair trades above the 110.30 level, buyers may test towards the 110.90 and 111.20 resistance levels.

The British pound is coming back under selling pressure against the US dollar after finding strong technical resistance from the 1.3245 level on Monday. If GBPUSD sellers can breach the 1.3100 support level, the key 1.3000 level may once again come into focus. Brexit news and moves in the US bond market are currently the main intraday drivers for the GBPUSD pair.

The GBPUSD pair is intraday bearish while trading below the 1.3100 level, key technical support is found at the 1.3000 and 1.2970 levels

If the GBPUSD pair trades above the 1.3100 level, buyers may test towards the 1.3205 and 1.3245 resistance levels.

Daily Pivots: (S1) 1.1292; (P) 1.1312; (R1) 1.1336; More.....

With 4 hour MACD crossed above signal line, intraday bias in EUR/USD is turned neutral first. Another fall remains mildly in favor and break of 1.1273 will target a test on 1.1176 low. Decisive break there will resume whole decline from 1.2555. On the upside, above 1.1448 will resume the rebound from 1.1176 to 1.1569 resistance instead.

In the bigger picture, medium term outlooks is a bit mixed for now as there are conflicting signals. We'll turn neutral first. On the downside, decisive break of 61.8% retracement of 1.0339 (2016 low) to 1.2555 (2018 high) at 1.1186 will resume the whole down trend from 1.2555. Next target will be 1.0339 low. Nevertheless, break of 1.1569 resistance should confirm medium term bottoming. Stronger rebound should be seen back to 38.2% retracement of 1.2555 to 1.1176 at 1.1703. In that case, the structure of the rise from 1.1176 and reaction to 1.1703 fibonacci level will be watched for making an assessment on whether medium term trend has reversed, or rebound form 1.1176 is merely a correction.