Market Roundup
- BoJ Gov Kuroda: Monetary policy actions by Fed, BoJ, ECB have been made to achieve price stability targets, not to depreciate their currencies; our target is achieving not just temporary 2 pct inflation but maintaining that level in stable manner; we have enough tools to combat deflation and to achieve price stability.
- BoJ Feb Policy Board minutes: Concerns over volatility in JGB market, risk tolerance of players down, deterioration in market functioning; Views divided on achieving inflation target, some uncertainty on export performance.
- Japan FinMin Aso: Praises BoJ Gov Kuroda's unwavering stance to defeat deflation, compiling provisional budget as full FY '15/16 budget delayed.
- RBA Gov Stevens: Transition from mining boom not seamless, will continue to support economy, AUD decline helping, global outlook better on crude, US.
- EU Statement: Greece to present full list of specific reforms in next few days, committed to solution, EuroGroup stands ready to reconvene ASAP.
- Greek PM Tsipras: Will present/implement reforms, more optimistic.
- German Chanc Merkel: Sees progress, no date for fresh funds.
- Foreign CB US debt holdings -$7.206 bln to $3.227 trln March 18 week, Treasury holdings -$6.026 bln to $2.900 trln, agencies -$1.303 bln to $283.25 bln.
- NY Fed: Swaps with foreign CBs $2 mln March 18 week, all with BoJ.
- New Zealand March ANZ/RM consumer confidence index 124.6, February 124.0.
- New Zealand annual migration gains hit record high in February.
- Malaysia's Feb CPI +0.1 pct on year.
Economic Data Ahead
- (0300 EDT/0700GMT) Germany Feb producer prices, +0.2% m/m, -1.9% y/y consensus; previous -0.6%, -2.2%.
- (0500 EDT/0900GMT) Eurozone Jan current account balance; previous E29.2 bln surplus nsa, E17.8 bln sa.
- (0500 EDT/0900GMT) Eurozone Jan net investment flows; previous E67.2 bln inflow.
- (0530 EDT/0930 GMT) UK Feb PSNB,GBP 7.7 bln consensus; previous - bln.
- (0530 EDT/0930 GMT) UK Feb - ex-banks,GBP 8.5 bln consensus; previous - bln.
- (0530 EDT/0930 GMT) UK Feb PSNCR; previous - bln.
Key Events Ahead
- N/A EU Summit in Brussels.
- N/A UK ChancExch Osborne at London conference.
- N/A UK DMO GBP1/1.5/1.5 bln 1/3/6-month treasury bill auctions.
- N/A Chicago Fed Evans panelist at Brookings Institution conference in WDC.
- N/A US TsySec Lew to participate in Miami discussion.
- (0400 EDT/0800 GMT) Buba VP Buch speech in Berlin.
- (1020 EDT/1420 GMT) Atlanta Fed Lockhart speech on policy in Athens, Georgia.
FX Recap
EUR: A short statement followed the joint European Council, Commission and eurogroup meeting overnight that said the Greek government will present a full list of specific reforms in the next days. Leaders said no specifics were discussed in terms of reforms or actual budget numbers. Tsipras agreed to speed up reform and Merkel expressed disappointment in progress since the Feb 20 agreement. EUR/USD is 70pts off its 1.0613 low.
JPY has not kept up with most other G10 currencies vs. the USD. USD/JPY is 120.70-78 leaving the likes of NZD/JPY, CAD/JPY and AUD/JPY 0.5 - 0.7% higher.
CNY/USD was fixed 36pts higher to 6.1496 overnight. The China Securities Journal reported that policymakers have directed various parts of government to begin looking at ways to ease housing market policies.
CAD: Large fuel price swings and unfavourable seasonals will likely result in some high m/m readings for headline and core CPI in Feb. The expected y/y rates, however, bely a more benign environment with the core measure to remain unchanged at 2.2%. Retail sales ex auto/fuel are forecast to bounce 0.6% in nominal terms following a weak 1.3% outturn. USD/CAD is back to 1.2680 off highs of 1.2757.
AUD traded from 0.7644 to as high as 0.7687 as the USD softened. Governor Stevens made some remarks to the American Chamber of Commerce overnight. He covered no new ground and passed up an opportunity to jawbone the currency, noting that the lower level would help but omitting the usual even-lower-would-be-even-more-helpful tone. Rate cuts "might" help economic growth, but they are not the main impediment to growth. In the Q&A he sidestepped questions around the current policy debate, saying he was "not here to offer steering on the next decision or two." AUD/NZD found support at 1.0300 as AUD outperformed against the majors.
NZD regained the 0.74 handle very early in Sydney after slipping in the NY session. It then rose to as high as 0.7451. NZ immigration remained at elevated levels at 4,820 in Feb.
