Market Roundup
• EU ZEW Economic Sentiment (Mar) -8.5, 26.5 forecast, 39.4 previous
•German ZEW Current Conditions (Mar) -62.9, -67.1 forecast, -65.9 previous
•German ZEW Economic Sentiment (Mar) -0.5, 39.0 forecast, 58.3 previous
Looking Ahead Economic Data (GMT)
•14:00 US Pending Home Sales (MoM) (Feb) -0.6% forecast, -0.8% previous
•14:00 US Pending Home Sales Index (Feb) 70.9 previous
•14:00 US NAHB Housing Market Index (Mar) 36 previous
•15:00 New Zealand GlobalDairyTrade Price Index 5.7% previous
Looking Ahead Events And Other Releases (GMT)
•15:15 German Buba President Nagel Speaks
Currency Forecast
EUR/USD : The euro initially dipped but recovered ground on Tuesday as investors braced for a slew of central bank meetings under the shadow of the U.S.-Israel war on Iran. The surge in energy prices as war engulfs the Middle East is top of mind for central bankers. Deciding what to do about it is proving more complicated.The debate is a foretaste of what may be ahead for rate-setting committees this week at the Federal Reserve, European Central Bank, Bank of England and Bank of Japan, which will assess the global economic impact of the energy shock, though all are expected to remain on hold. The Bank for International Settlements has urged policymakers not to rush reactions to the energy price spike, calling it a textbook case of when to "look through" a supply shock.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 1.1520(38.2%fib), an upside break can trigger rise towards 1.1620 (50%fib).On the downside, immediate support is seen at 1.1404(23.6%fib), a break below could take the pair towards 1.1368(Lower BB).
GBP/USD: Sterling ticked higher against the U.S. dollar as investors waited for a heavy slate of central bank meetings, including the Bank of England. Investors' focus this week will be on interest rate decisions in the UK, the U.S., and Europe and comments from policymakers on how they intend to navigate the potential energy-driven inflationary pressures.Investors expect the BoE to keep rates steady on Thursday, with investors closely watching any signals about how policymakers would react to a potential new oil shock. British borrowing costs dipped for a second day but remained well above levels seen before the Iran war, with markets now pricing roughly 50% odds of a Bank of England hike in November. Immediate resistance can be seen at 1.3394(38.2%fib), an upside break can trigger rise towards 1.3421(SMA 20).On the downside, immediate support is seen at 1.3212(23.6%fib), a break below could take the pair towards 1.3208(Lower BB).
AUD/USD: The Australian dollar firmed on Tuesday as investors digested Reserve Bank of Australia ,rate decision . Australia’s central bank raised its cash rate for a second consecutive month to curb inflation, but a close vote signaled that further rate hikes are uncertain.Australia’s central bank raised its cash rate by 25 bps, with a close vote highlighting uncertainty ahead. The RBA started a busy central bank week, as surging oil prices from Middle East tensions raise inflation risks and peers prepare to pause. Rising oil prices from the U.S.–Israel conflict with Iran have heightened inflation concerns and driven a global repricing of rate expectations. Immediate resistance can be seen at 0.7075(38.2%fib), an upside break can trigger rise towards 0.7169(23.6%fib).On the downside, immediate support is seen at 0.6981(50%fib), a break below could take the pair towards 0.6941(Lower BB).
USD/JPY: The US dollar edged eased on Tuesday as yen gained some traction despite verbal warnings from Japanese authorities. Bank of Japan Governor Kazuo Ueda said underlying inflation was accelerating towards the bank's 2% target, stressing that price rises must be matched by solid wage gains.Further increases in oil prices, a prolonged closure of the Strait of Hormuz and a dovish outcome from this week's BOJ meeting could see the dollar/yen test 160.Japan Finance Minister Satsuki Katayama said on Monday and reiterated on Tuesday that the government was prepared to take decisive steps against volatility in foreign exchange and other financial markets.. Immediate resistance can be seen at 159.84(23.6%fib) an upside break can trigger rise towards 160.00(Psychological level) .On the downside, immediate support is seen at 157.66(38.2%fib) a break below could take the pair towards 156.87 (SMA 20).
Equities Recap
European shares edged higher as investors assessed Middle East risks and awaited the ECB’s rate decision.
At GMT (13:10) UK's benchmark FTSE 100 was last trading up at 0.81 percent, Germany's Dax was up by 0.46 percent, France’s CAC was up by 0.72 percent.
Commodities Recap
Gold held steady as safe-haven demand from geopolitical tensions was offset by caution ahead of the Fed decision.
Spot gold was almost flat at $5,001.36 per ounce as of 10:57 GMT. U.S. gold futures for April delivery edged 0.1% higher to $5,005.20.
Oil jumped nearly 3% as Iranian attacks on the UAE revived supply fears, with Hormuz still mostly shut.
Brent crude futures jumped by $2.57, or 2.6%, to $102.78 a barrel by 1211 GMT while U.S. West Texas Intermediate (WTI) crude gained $2.51, or 2.7%, to $96.01.
