Market Roundup
• Japan Trade Balance (Feb): 57.3B, -483.2B forecast, -1,163.5B previous
• Japan Exports (YoY) (Feb): 4.2%, 1.6% forecast, 16.8% previous
• Japan Adjusted Trade Balance: -0.37T, -0.62T forecast, 0.50T previous
• Japan Imports (YoY) (Feb): 10.2%, 11.5% forecast, -2.6% previous
Looking Ahead Economic Data (GMT)
• 10:00 EU CPI (YoY) (Feb): 1.9% forecast, 1.7% previous
•10:00 EU Core CPI (YoY) (Feb): 2.4%, 2.2% previous
•10:00 EU CPI (MoM) (Feb): 0.7%, -0.6% previous
•10:00 EU HICP ex Energy and Food (MoM) (Feb): 0.7%, -0.8% previous
•10:00 EU HICP ex Energy & Food (YoY) (Feb): 2.3%, 2.1% previous
•10:00 EU Core CPI (MoM) (Feb): 0.8%, -1.1% previous
•10:00 EU CPI ex Tobacco (MoM) (Feb): -0.6%
•10:00 EU CPI ex Tobacco (YoY) (Feb): 1.6%
•10:00 EU CPI, n.s.a (Feb): 100.72, 100.05 previous
Looking Ahead Events And Other Releases (GMT)
•No Events Ahead
Currency Forecast
EUR/USD : The euro firmed on Wednesday as easing crude oil prices allowed for a glimmer of risk appetite ahead of a slate of central bank policy meetings.The U.S. Federal Reserve will announce its policy decision on Wednesday, with the ECB, Bank of England and Bank of Japan following a day later. They are all widely expected to maintain interest rates. Instead, traders will be looking for commentary about inflation and economic outlook amid war in the Middle East. The dollar index, which measures the greenback relative to six major peers, edged down fell 0.04% to 99.51, extending its losing streak to a third session. The euro EUR= was up 0.04% at $1.1543..Markets are on edge, trying to price in the economic damage from U.S. President Donald Trump's war with Iran and the policy reaction it could trigger. Immediate resistance can be seen at 1.1546(38.2%fib), an upside break can trigger rise towards 1.1659 (50%fib).On the downside, immediate support is seen at 1.1472(March 17th low), a break below could take the pair towards 1.1421(23.6%fib).
GBP/USD: The pound edged higher on Wednesday as dollar eased investors turned their attention to U.S. Federal Reserve meeting to see how policymakers will balance growth and inflation risk amid conflict in the Middle East. After the Reserve Bank of Australia kicked off a busy week for global central banks with an interest rate hike, all eyes are now on the Fed's policy meeting later in the day. Attention will be on updated economic forecasts, especially the "dot plot", where the risk is that it might no longer project any rate cuts at all this year.The Fed is widely expected to keep its policy steady but the debate will very much centre on whether conflict with Iran is likely to disrupt economic growth, threaten more persistent inflation or create a confounding mix of economic slowing and rising prices.Fed Chair Jerome Powell will also hold a press conference, and markets will be watching for any hint on whether he intends to remain on the Board as a governor once his term as chair ends in May. Immediate resistance can be seen at 1.3373(38.2%fib), an upside break can trigger rise towards 1.3417(SMA 20).On the downside, immediate support is seen at 1.3260(Lower BB), a break below could take the pair towards 1.3208(23.6%fib).
AUD/USD: The Australian dollar edged higher on Wednesday as Australian dollar remained bid following the Reserve Bank of Australia’s rate hike.The Reserve Bank of Australia raised its benchmark cash rate by 25 basis points to 4.10% on Wednesday, marking the highest level in 10 months. This move effectively reverses two of the three rate cuts implemented last year, signaling a clear shift back toward tightening.RBA Governor Michele Bullock indicated that the board unanimously agreed further tightening was necessary, though there was some debate about the timing of additional rate hikes. Markets imply a 50-50 chance the Reserve Bank of Australia will hike again at its next meeting in May, and rates of 4.35% are fully priced by August. Australia’s February employment data is due Thursday, with the Reuters consensus pointing to an unemployment rate of 4.1%. Labour market resilience could further support expectations of additional RBA tightening. Immediate resistance can be seen at 0.7158(Higher BB), an upside break can trigger rise towards 0.7197(23.6%fib).On the downside, immediate support is seen at 0.7066(38.2%fib), a break below could take the pair towards 0.6996(Lower BB).
USD/JPY: The US dollar eased on Wednesday as investors assessed the economic impact of the Middle East conflict ahead of the U.S. Federal Reserve's policy decision. Markets are in a holding pattern ahead of key central bank decisions, with investors reluctant to take strong positions before major policy signals.Central banks in the US,UK, the euro zone, Japan, Canada, Switzerland, and Sweden will also meet this week in their first sessions since the start of the Iran war.The Federal Reserve is set to announce its decision later today, and is widely expected to keep rates unchanged. Attention will be on guidance and projections. Meanwhile, the Bank of Japan meets tomorrow, and is also expected to maintain its current policy stance.The ongoing Middle East conflict continues to pose upside risks to inflation and downside risks to growth, particularly via energy markets, which could complicate the global macro outlook. Immediate resistance can be seen at 159.71(23.6%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 158.60(Daily low) a break below could take the pair towards 157.52 (38.2% fib).
Equities Recap
Asian shares rose on Wednesday as oil prices steadied, with focus shifting to the Federal Reserve’s policy decision amid Middle East tensions.
Japan’s Nikkei 225 was up by 3.15% , Hang Seng was up at 079%, China A50 was up at 0.19%
Commodities Recap
Gold prices were steady on Wednesday as investors awaited the Federal Reserve decision while assessing the economic impact of Middle East tensions.
Spot gold edged up 0.1% at $5,008.58 per ounce as of 0629 GMT. U.S. gold futures for April delivery rose 0.1% to $5,012.60.
Oil prices fell over $2 on Wednesday, trimming prior gains after Iraq and Kurdish authorities agreed to resume exports via Turkey’s Ceyhan port, easing supply concerns.
Brent futures retreated $2.26, or 2.19%, to $101.16 a barrel by 0429 GMT on Wednesday. U.S. West Texas Intermediate crude dropped $2.99, or 3.11%, to $93.22.
