Market Roundup
- Euro dollar declines sharply to fresh 4- day low at 1.0806.
- Sterling sinks to fresh weekly low close to $ 1.48 handle.
- BOE's Broadbent - ECB is not trying to devalue euro, focusing on lack of demand; we are mindful of exchange rate, but do not try to finesse it; MPC needs to be watchful, not pre-commit to any policy path; CPI may still be below target even after it bounces back; expects real household incomes to rise 4% Q1, boost consumption.
- BOE's Haldane - Macro-prudential tools might need to be developed on asset-class basis, rather than on national basis.
- Bank of Italy head says there is no inflation in Italy; rather there is a risk of deflation.
- Japan FinMin Aso: To keep close contact with U.S. on AIIB.
- Italy Jan retail sales nsa yy increases to 1.7 % vs previous 0.10 %.
- Italy Jan retail sales sa mm increases to 0.1 % vs previous -0.20 %.
- Italy Jan industrial sales yy nsa decreases to -2.5 % vs previous 0.90 %.
- Italy Jan industrial sales mm sa decreases to -1.6 % vs previous 1.40 %.
- Italy Jan industrial orders yy nsa decreases to -5.5 % vs previous 5.80 %.
- Italy Jan industrial orders mm sa decreases to -3.6 % vs previous 4.50 %.
- France mar consumer confidence increases to 93 (consensus 93) vs previous 92.
- United Kingdom Mar nationwide house price yy decreases to +5.1 % vs previous 5.7 %.
- United Kingdom Mar nationwide house price mm increases to +0.1 % vs previous -0.1 %.
- Germany Feb import prices yy increases to -3.0 % (consensus -3.5 %) vs previous -4.4 %.
- Germany Feb import prices mm increases to 1.4 % (consensus 0.7 %) vs previous -0.8 %.
Economic Data Ahead
- (0830 EDT/1230 GMT) US Real GDP (final Q4) consensus +2.4% q/q AR, previous +2.2% q/q AR
- (0830 EDT/1230 GMT) US Real Final Sales (final Q4) consensus +2.2% q/q AR, previous +2.2% q/q AR
- (0830 EDT/1230 GMT) US PCE Deflator (final Q4) consensus +1.1% q/q AR, previous +1.1% q/q AR
- (1000 EDT/1400 GMT) US U Michigan Consumer Sentiment (Mar) consensus 92.0, previous 91.2
- (1000 EDT/1400 GMT) US U Michigan Current Conditions (Mar) consensus 103.5, previous 103.0
- (1000 EDT/1400 GMT) US U U of Michigan Expectations (Mar) consensus 84.0, previous 83.7
Key Events Ahead
- (1010 EDT/1410 GMT) Greek FinMin Varoufakis speech in London
- (1145 EDT/1545 GMT) FedTrade 30-year Ginnie Mae (max $1.075 bln)
- (1545 EDT/1945 GMT) Fed Chair Yellen speaks on the new normal for monetary policy at FRB San Francisco conf
FX Recap
EUR/USD failed to break below 1.0800 today. It currently trades at 1.0827 levels and overall trend remains with bears. Stops are seen below 1.0800, Support seen at 1.0810 10-DMA, 200-HMA. Breach of 1.0800 exposes Mar 23 low at 1.0768. 1.0760 50% 1.0457-1.1062. Option expiries at 1.0875 (1BLN), 1.0900 (716M), 1.0925 (351M), 1.1000 (3.2BLN).
USD/JPY: Tracking weakness in the US Treasury yields, the pair trimmed gains having tested 119.47 levels (50-DMA). It is likely to find major resistance at this level and a break above could see the pair testing 119.71 levels. On the downside, support is located at 119.18 levels and a break below could push it further down to 118.90 levels. Option expiries at 118.30-35 (500M), 119.00 (1.4BLN), 119.45-50 (400M).
USD/CAD has once again take support at 1.2400 and recovered till 1.2519. Overall trend is bullish as long as support 1.24475 holds. On the upside minor resistance is around 1.2550 and nay break above will take the pair further up till 1.2615/1.2660. The pair's minor support is around 1.2480 and any break below will drag the pair further to 1.2440/1.2400. Option expiries at 1.2465 (925M), 1.2500 (278M), 1.2525 (242M).
USD/CHF extended its move up north, hitting fresh four day high just below 0.97 handle in Europe. It currently trades at 0.9662 levels. On the top side, immediate resistance is seen at 0.9693 levels, a break above could see a climb to 0.9751 levels. On the other hand, support is seen at 0.9624 levels, and further below at 0.9549 levels. Option expiries at 0.9700 (216M). In line with the euro, EUR/CHF saw modest selling interest hitting 1.0458 low from 1.0508 high.
GBP/USD remained subdued on Friday and extended its downward movement to 1.4825/20 levels. Pair obtained support from Carney's speech in which he hinted about expectation on interest rate hike. Pair pushed recovery envelope from 1.4799. 1.4867 = 10DMA & Asia top. 1.4870 = rally high from 1.4807 Thursday low. Pair sees support at 1.4689 and 1.4799 levels, resistance at 1.5008 and 1.5155 levels.
