Market Roundup
- Dollar recovers in Europe, EUR/USD 1.0631 low from 1.1062 post FOMC.
- SNB keeps target rate for Libor unchanged at -0.25 pct.
- SNB keeps interest rate on sight deposits unchanged at -0.75 pct.
- SNB'S Jordan says Switzerland has to accept lower inflation rate in short term; more exceptions to negative interest rates would make measure less effective.
- BOJ Gov Kuroda: Too early now to debate timing, specifics on how to end BOJ'S QE programme.
- Japan PM Abe: Fully aware wave of economic recovery has not reached throughout the country.
- ECB Governing Council approves 400 mln euros of additional emergency liquidity for Greek banks.
- European Union Q4 wages in Euro Zone decreases to 1.0 % vs previous 1.4 %.
- European Union Q4 labour costs yy decreases to 1.1 % vs previous 1.3 %.
Economic Data Ahead
- (0830 EDT/1230 GMT) US Initial Jobless Claims (Mar 14 week)(consensus 292k, previous 289k)
- (0830 EDT/1230 GMT) US Continued Claims (Mar 7 week) (consensus 2.410 mln, previous 2.418 mln)
- (0830 EDT/1230 GMT) US Current Account (Q4) (consensus -$103.2 bln, previous -$100.3 bln)
- (1000 EDT/1400 GMT) US Leading Indicators (Feb) (consensus +0.2% m/m, previous +0.2% m/m)
- (1000 EDT/1400 GMT) US Philly Fed Manufacturing Survey (Mar) (consensus 7.1, pre 5.2)
Key Events Ahead
- N/A FRB Dallas's Fisher (non-voter, haweek) steps down
- (1000 EDT/1400 GMT)Fed Governor Tarullo (voter, dovish) testifies on regional bank regulation
- (1145 EDT/1545 GMT) FedTrade 30-year Fannie Mae / Freddie Mac (max $1.975 bln)
FX Recap
EUR/USD: Starting close to 1.0800 the pair fell with little pause to 1.0631 erasing all of massive the rally that followed yesterday's FOMC meeting. 1.0758 - 1.0919 is the overnight range. Spot retraced from post-Fed 1.1043 high to below 1.08 as short covering fizzles out. Traders prefer selling on rallies with Greece/EU tensions and funding uncertainty back to the fore. 1mth RR jumped to -1.0950. Minor support at yesterday's 1.0580 low and a 76.4% retrace of the 1.0457-1.1062 rally at 1.0600 are all that bars a retest of trend lows.
USD/JPY: 119.68 - 120.62 is the overnight range. Spot rebounded after dovish Fed led plunge below 119.50 overnight. Shift of market consensus for Fed lift-off to September may cap short-term upside. 121.00 strike expiring on Friday at the NY cut worth 3.6bn, which has a good chance of attracting spot. EUR/JPY has seen a range of 128.42-130.46, intra-day bears need an hourly close sub 128.54 pivot point in order of the market to weaken further. There are NY cut option expiries at 128.50 (326M) & 130.00 (258M).
GBP/USD: Cable retreated below 1.49 after posting a 1.5166 high after the Fed. 1.4882 - 1.5010 is the overnight range, the pull-back in US yields may slow cable's pre-May election descent towards 1.4500. EUR/GBP traded at 0.7293, the high in Asia, support is found at 0.7192.
AUD/USD: 0.7722 - 0.7808 is the overnight range. Spot retreated from short-covering rally to 0.7849 high. 0.7651 is a 76.4% fibo of yesterday's ascent from 0.7591 to 0.7846 (post-FOMC high). Interest rate futures suggest there is a 50% chance of a 25bp RBA rate cut on Apr 7 vs 35% pre-FOMC. 2y AGB/UST yield spread widened out to 124bp but support could be undone by RBA's Stevens tomorrow. EUR/AUD failed to hold gains above 1.40.
USD/CAD saw resistance at 1.2675 after extending north from 1.2449 (yesterday's post-FOMC low) as post-FOMC reverberations continue. US Q4 current account data is due at 8.30am ET, alongside US weekly jobless claims. March's Philly Fed survey is due at 10am ET.