Market Roundup
- BoE-ECB strike deal sharing deal over central counterparties.
- Central banks call for lower capital requirements on top-quality pooled debt, ECB shelves EUR clearing house policy.
- BoE DepGov Broadbent: UK rates likely higher over MPC forecast period.
- BoJ Gov Kuroda: FX moving in line with fundamentals, no negative economic impact, not conducting policy to impact FX.
- Japan PM Abe: Monetary policy not aimed at weakening JPY.
- China PBOC Gov Zhou calls for vigilance on deflation.
- China takes measures to unclog its fiscal spending channel.
- Japan Feb industrial output -3.4% m/m, biggest drop since June '14, -1.8%, consensus, -2.0% seen in March, previous estimate -3.2%, April consensus at +3.6%.
- New Zealand Q1 Westpac/MI employee confidence index 108.5, Q4 '14 106.5.
Economic Data Ahead
- (0300 EDT/0700 GMT) Spain Mar HICP - flash, -0.9% y/y consensus; previous -1.2%.
- (0300 EDT/0700 GMT) Switzerland Mar KOF indicator, 89.1 consensus; previous 90.1.
- (0400 EDT/0800 GMT) Italy Mar consumer confidence index, 110.9 consensus; previous 110.9.
- (0400 EDT/0800 GMT) Italy Mar business confidence index, 99.8 consensus; previous 99.1.
- (0430 EDT/0830 GMT) UK Feb mortgage lending, GBP1.6 bln consensus; previous bln.
- (0430 EDT/0830 GMT) UK Feb mortgage approvals, 61.5k consensus; previous 60.79k.
- (0430 EDT/0830 GMT) UK Feb money supply M4; previous -0.8%.
- (0430 EDT/0830 GMT) UK Feb consumer credit, GBP900 mln consensus; previous GBP 820 mln.
- (0500 EDT/0900 GMT) Eurozone Mar business climate index, 0.18 consensus; previous 0.07.
- (0500 EDT/0900 GMT) Eurozone Mar economic sentiment index, 103.1 consensus; previous 102.1.
- (0500 EDT/0900 GMT) Eurozone Mar industrial sentiment index, -4.0 consensus; previous -4.7.
- (0500 EDT/0900 GMT) Eurozone Mar services sentiment index, 5.1 consensus; previous 4.5.
- (0500 EDT/0900 GMT) Eurozone Mar consumer confidence index, -3.7 consensus; previous -6.7.
- (0800 EDT/1200 GMT) Germany Mar HICP - prelim, +0.5% m/m, +0.1% y/y consensus; previous +1.0%, -0.1%.
- (0830 EDT/1230 GMT) US Feb personal income, +0.3% m/m consensus; previous +0.3%.
- (0830 EDT/1230 GMT) US Feb personal consumption, +0.2% m/m sa consensus; previous -0.2% sa, +0.3% nsa.
- (0830 EDT/1230 GMT) US Feb PCE price index; previous -0.5% m/m, +0.2% y/y.
- (0830 EDT/1230 GMT) US Feb - core, +0.1% m/m consensus; previous +0.1% m/m, +1.3% y/y.
- (1000 EDT/1400 GMT) US Feb pending home sales, +0.4% m/m consensus; previous +1.7%.
- (1030 EDT/1430 GMT) US Mar Dallas Fed mfg business index; previous -11.2.
- (1300 EDT/1700 GMT) US Feb Dallas Fed PCE; previous -0.3%.
Key Events Ahead
- N/A OECD Sweden economic survey, France 3/6/12-month BTF auctions.
- (0600 EDT/1000 GMT) Italy E1.5-2/2-2.5 bln 1.05/1.5% 2019/25 BTP auctions.
- (0600 EDT/1000 GMT) Italy E2-3 bln 0.369% 2022 CCTeu auction.
- (1915 EDT/2315 GMT) FOMC ViceChair Fischer speech at Atlanta Fed dinner event.
FX Recap
USD/JPY is expected to continue its choppy trade and stay around 119.00 levels. It currently trades at 119.23 levels. Market now focuses on U.S. data (personal spending, personal income) scheduled later in the day and weaker data could see some pick-up in activity in the pair. To the upside, resistance is located at 119.40 levels and on the downside, support is located at 119.00 levels.
AUD/USD dropped to fresh one-week lows on Monday and currently trades at 0.7726 levels. It was unable to sustain above 0.7912 resistance, it breached last week. Near term outlook remains with the bears. On the downside, support is seen at 0.7559 levels and a break below could see the pair testing 0.7182 levels, the next Fibonacci level. On the other hand, a convincing break above 0.7912 levels would confirm the end of bearish trend and could push the pair to 0.8294 levels and beyond.
NZD/USD slipped around 0.5 percent to 0.7525 levels and trades at 0.7535 levels at present. Strengthening US dollar and NZD/JPY sales in Tokyo pulled the pair down, along with the stops below 0.7544 (Fri low) levels.The global dairy auction due on Tuesday is likely to keep the pair under pressure.
EUR/USD remains bearish for the near term. It currently trades at 1.0872 levels, unable to break above key 1.10 handle. A break above the said resistance level would dampen the bearish trend and extend the gains to 1.1045 levels, and a daily close above 1.1165 will suggest bullish setup.
USD/CAD: Intraday bias seems neutral thus far. It currently trades at 1.2618 levels. The recent upward move is likely to be extended higher. It sees major support at 1.2406 levels and a break below would suggest end of bullish trend and pair could be seen testing 38.2% retracement of 1.0620 to 1.2834 at 1.1988 levels. On the flip side, resistance is seen at 1.2834 levels and a break above would extend its gains to 1.3063 levels.
