Market Roundup
- BOJ keeps monetary policy unchanged, pledges to increase monetary base at annual pace of 80trln yen, policy decision made by 8-1 vote.
- BOJ Board Member Kiuchi proposed changing monetary policy to expand monetary base at annual pace of 45trln yen, proposal rejected by majority vote.
- BOJ Kiuchi proposed making 2 percent inflation target a medium to long-term goal and agreeing to keep asset purchases and zero interest rates as long as appropriate, proposal rejected by 8-1 vote.
- PBOC sets yuan mid-point at 6.1345 / dlr vs last close 6.1983.
- Japan Feb Unadjusted Current Account Surplus jpy1440bln yen.
- UK March Retail Prices decline 2.1%, biggest drop since records began in Dec 2006, vs 1.7% fall in Feb.
Economic Data Ahead
- (0200 EDT/0600GMT) Germany Industrial Orders mm, consensus 1.5, previous -3.9.
- (0245 EDT/0645GMT) FranceTrade Balance, previous -3.726.
- (0245 EDT/0645GMT) FranceImports, previous 40.575.
- (0245 EDT/0645GMT) FranceExports, previous36.849.
- (0315 EDT/0715GMT) Switzerland CPI mm, consensus 0.2, previous -0.3.
- (0500 EDT/0900GMT) EurozoneRetail Sales mm, consensus -0.2, previous 1.1
Key Events Ahead
- N/AUK BoE Monetary Policy Committee Meeting, day 1.
- (0530 EDT/0930 GMT) GERMANY 2Y 4.000B 0.000%10/03/17.
- (0630 EDT/1030 GMT) UK 5Y 4.000B 2.000% 22/07/20 TAP.
- (0930 EDT/1330 GMT) US Fed's Dudley Speaks on Monetary Policy in New York.
- (1400 EDT/1800GMT) U.S. Fed Releases Minutes from March 17-18 FOMC Meeting.
FX Recap
USD/JPY remained largely unchanged in mid-Asia and is seen hovering around 120.03 levels, after the Bank of Japan maintained its monetary policy stance. On the topside, the immediate resistance is seen at 120.32 (Today's High) levels and above which gains could be extended to 120.50 levels. On the flipside, next support is likely to be found at 119.84 (50-DMA) below that at 119.22 (100-DMA) levels.
AUD/USD continued moving upwards in the Asian session and currently trades at 0.7664 levels. Although the Reserve Bank of Australia left its policy unchanged yesterday, there was no real change in rhetoric, with the easing bias still seen for a possible rate cut in May. While a relief-rally in the Aussie was very likely, sustainable gains seen so far are not in sync with the central Bank stance. Resistance is located at 0.7700 levels soon. A break above would push the pair to 0.7741 levels. On the other hand, it is likely to find support at 0.7600 levels and further below at 0.7560 levels.
NZD/USD moved higher and traded in the green in the mid-Asian session as the New Zealand dollar bounced back strongly from choppy trade seen yesterday post-RBA decision. The pair sees major resistance at 0.7535 (20-DMA) levels and a break above could push it to 0.7559 (100-DMA) levels. On the flipside, it is expected to find support at 0.7500 levels below that at 0.7450 levels.
GBP/USD: The bears flexed their muscles yesterday and the pair bottomed at 1.4802 levels. The bearish bias remains intact in nearest term testing 1.4750 levels. It currently trades at 1.4837 levels with immediate resistance located at 1.4860 levels. A convincing break above could lead it to neutral zone testing 1.4900/20 area.
EUR/USD continued moving south yesterday and bottomed at 1.0802 after the failure to break above 1.1040 key resistance. Overall bias stays with the bears in short-term and likely to test 1.0700 area. It currently trades at 1.0845 levels with immediate resistance located around 1.0870 levels. A break above could see the pair testing 1.0900 - 1.0950 area.
