ASIA IN RANGE , DOLLAR FIRM ON FED, OIL WEAK

ECONOMY

• On Thursday, Asian markets in range-bound with two major centers - Japan and China - shut for holidays while the dollar held on to overnight gains after the U.S. central bank poured cold water on rate cut expectations.

• A U.N. Security Council committee blacklisted the head of the Pakistan-based militant group Jaish-e-Mohammed (JeM) on Wednesday after China dropped its objection to the move, ending a long diplomatic impasse.

• In the press conference, Chairman Powell chose to strike a somewhat more hawkish tone, attributing the unexpected fall in core inflation this year to transitory factors and not signaling much concern about the underlying inflation picture at the moment.When pressed on the potential for a rate cut, he simply emphasized that the Committee is satisfied with the current policy stance and did not give away much more for markets to cling onto.

• Global equities markets have scaled new highs since the start of the year largely on expectations of easy monetary policies around the world while a positive tone on U.S.-China trade negotiations has also aided sentiment.

• Sell in May and go away, which warns investors to dump their equities holdings in May ahead of the northern hemisphere summer trading lull and switch to fixed income in a bid to maximize returns.

• We remain constructive that the recovery in China will translate into a recovery in the emerging market-export complex and Europe; the worst-case scenario will be avoided regarding Brexit and that the recent progress will materialize in a U.S.-China deal in 2Q.

• It follows that the overall environment is therefore still favorable for EM, not so much due to cheap valuations but still attractive enough risk-adjusted carry.

• Investors are keeping a close eye on first-quarter earnings for clues on the health of the U.S. corporate sector.

• India began evacuating hundreds of thousands of villagers on Wednesday and shut down operations at two major ports on its east coast ahead of an impending cyclone expected to make landfall on Friday.

CURRENCY

• The greenback took a breather following strong gains overnight after the U.S. Federal Reserve kept the target range for its policy rate unchanged at its May meeting.

• The dollar index held at 97.63 against a basket of major currencies after going as high as 97.728 on Wednesday.

• Gains in the the dollar were limited by a 0.43% rise in GBP/USD to $1.3090 on better-than-expected U.K. housing data.

• EUR/USD fell 0.17% to $1.1197 on thin volumes as European markets were shut for Labor Day.

• USD/CAD rose 0.37% to C$1.3435 as the loonie was hurt by a fall in oil prices after the U.S. Energy Information Administration weekly petroleum reported showed U.S. crude stockpiles rose much more-than-expected.

• USD/JPY rose 0.12% to 111.55 as safe-haven yen came under pressure amid an uptick in risk sentiment as U.S. markets remained on track to close at fresh record highs.

COMMODITIES

• Oil prices declined after data showed U.S. crude production output set a new record last week but the losses were capped by the intensifying crisis in Venezuela and the stopping of Iranian oil sanction waivers by Washington.

• U.S. crude was last off at $63.57 a barrel while Brent slipped to $72.09.

• Spot gold was unchanged at $1,277.07 an ounce.