Market Roundup
- U.S. Fed to markets: No more promises.
- Japan CabSec Suga: Expect higher annual pay rises to spread.
- EU Moscovici: Won't keep Greece in EZ at any price.
- US Treasury Sec Lew: Suspending G Fund investments to avoid debt ceiling breach.
- Japan Feb trade deficit Y424.6 bln, much better than trln expected, exports +2.4% y/y, imports -3.6%, +0.3% and +3.1% expected, exports to US +14.3%, to China -17.3%, to rest of Asia -1.1%.
- China Feb new home prices -5.7%y/y, Jan -5.1%, StatsBureau expects March rebound.
- Australia Feb Westpac/MI leading index 98.21, 0.45% above trend, Jan 97.94.
- New Zealand Q4 Current Account Deficit NZ$3.19 bln, NZ$3.15 bln consensus, -3.3% of GDP year-to-Dec 31.
- Dairy prices, volumes fall at NZ Fonterra auction, GDT index -8.8%.
Economic Data Ahead
- (0500 EDT/0900 GMT) Italy Jan trade balance - global, EU; previous bln, E510 mln surpluses.
- (0530 EDT/0930 GMT) UK Feb claimant count, -30k consensus; previous -38.6k.
- (0530 EDT/0930 GMT) UK Jan ILO unemployment, 5.6% consensus; previous 5.7%.
- (0530 EDT/0930 GMT) UK Jan average weekly earnings - 3-mo average, +2.2% y/y consensus; previous +2.1%.
- (0530 EDT/0930 GMT) UK Jan average weekly earnings ex-bonus,+1.8% y/y consensus; previous +1.7%.
- (0600 EDT/1000 GMT) Switzerland Mar ZEW investor sentiment index; previous -73.0.
- (0600 EDT/1000 GMT) Euro Zone Jan trade balance, E15.0 bln surplus consensus; previous E24.3 bln surplus.
Key Events Ahead
- N/AUK ChancExch Osborne presents '15 budget to Parliament.
- N/AECB Governing Council, Riksbank executive board meetings.
- N/ARiksbank Gov Ingves, Sweden FinMin Andersson present outlook for '15.
- N/ABuba Dombret, ECB Coeure, BoE Cunliffe speeches at Frankfurt conference.
- N/AGreece E1 bln 13-week bill, Portugal 2-2.5 bln 6/12-mo bill auctions.
- N/ASweden government bond auction.
- (0400 EDT/0800 GMT) Iceland central bank policy announcement.
- (0530 EDT/0930 GMT) BoE MPC March meeting minutes, unanimous vote for no change in policy.
- (0530 EDT/0930 GMT) Denmark National bank presents Q1 '15 monetary review, accounts.
- (0600 EDT/1000 GMT) ECB Pres Draghi speech at Frankfurt ceremony.
- (0600 EDT/1000 GMT) OECD interim economic outlook.
- (0630 EDT/1030 GMT) Germany E4 bln 0.5% 2025 Bund auction.
- (1400 EDT/1800 GMT) FOMC policy announcement/18:30 FOMC Chair Yellen press conference.
FX Recap
Major FX pairs have been in tight ranges overnight ahead of this evening's FOMC decision. A dull session in terms of data/news flow has not helped the case in Asia either, with most markets similarly quiet in the region.
USD/JPY: Q4 financial accounts data showed that pension funds net sold trn of JGBs and net bought trn of foreign bonds and equities, both record amounts. USD/JPY has been near 121.35 overnight, it ranged between 121.30 and 121.40 most of the session.
USD/CNY: Yesterday's media reports that the PBoC had rolled over its entire medium-term lending facility and decided to lower the 7-day repo rate 10bps to 3.65% have also coincided with some lower-than-expected CNY fixes. Today's 6.1556 fix was another 29pts lower, with USD/CNH falling 75pts to 6.24 on the headlines to be almost five big figures lower thanFriday's highs. Equity markets are broadly taking the moves as positive, with the CSI300 up 1%. Iron ore futures, however, were down 3.5%.
AUD/USD rose to 0.7630 from 0.7613. Dalian iron ore futures tumbled 3.7%. The Australian Department of Industry and Science's forecast for iron ore was revised down to $60/mt over the year, from $63 in Dec.
NZD/USD traded from 0.7300 to 0.7320, Q4 data showed that the NZ current account deficit was 3.3% of GDP, as expected, with no market reaction. AUD/NZD edged higher to 1.0440.
GBP/USD: The pre-election Budget should provide the government with some good news. favourable forecast revisions could tempt the Chancellor to ease policy a little heading into the election, without increasing borrowing forecasts, which would be marginally positive for GBP. The real appreciation of GBP to have been a focus of the MPC meeting.
EUR/USD traded 15 pips either side of 1.0600.
USD/CAD: Lead WTI futures had fallen beneath $43 by late NY and opened sub-$42.50 in Asia. USD/CAD was a touch higher through this but has not traded above 1.28 in Asia.
