Market Roundup
- Dollar index makes fresh 11 year high in Asia at 97.781.
- ECB says ECB and Eurosystem have started purchases under public sector purchase programme.
- EUR/USD recovers to 1.0905 in the European session, from 1.0822 12 year low in Asia.
- Germany's Bundesbank says on ECB bond-buying programme that it is active in market for government bonds since this morning.
- Germany's Merkel says our political goal is for Greece to stay in euro zone; solidarity with Greece must be balanced by readiness to reform.
- China central bank policy advisor says China should not adopt excessive policy to stimulate demand.
- Japan PM Abe: agreed with German chancellor Merkel to reach broad agreement on Japan-EU free trade pact by year end.
- BoJ's Nakaso: What policy steps to take if BoJ were to ease again depends on economic, price conditions at the time.
- European Union Mar Sentix Index increases to 18.6 (consensus 15.0) vs previous 12.4.
- Germany Jan Trade Balance, SA decreases to 19.7 bln eur (consensus 21.0 bln eur) vs previous 21.8 bln eur.
- Germany Jan Imports mm SA increases to -0.3 % (consensus 0.5 %) vs previous -0.8 %.
- Germany Jan Exports mm SA decreases to -2.1 % (consensus -1.50 %) vs previous 3.40 %.
- Japan Feb Economy Watchers poll increases to 50.1 vs previous 45.6.
Economic Data Ahead
- (1000 ET/1500 GMT) US Conference Board Employment Trends Index (Feb) (previous 127.9)
Key Events Ahead
- (1145 ET/1645 GMT) FedTrade operation 15-year Fannie Mae / Freddie Mac (max $500 mln)
- (1425 ET/1925 GMT) FRB Cleveland's Mester speaks before National Association for Business Economics (NABE)
- (1430 ET/1930) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.125 bln)
- (1930 ET/0030 GMT)FRB Dallas's Fisher reflections, final speech
FX Recap
EUR/USD moved higher in the morning European session as markets brace for the QE launch and focus on the Euro group meeting. It now trades around 1.0901 levels, having posted session highs at 1.0905. However, the pair remains underpinned by divergent monetary policies between the U.S. and the common currency area. Resistance is seen at 1.0900 levels and then at 1.0950 levels. Support is located at 1.0836 levels and further at 1.0800 levels. Option expiries at 1.0900 (702M), 1.1000 (870M)
USD/JPY is currently trading at 120.69 with a high of 121.11 and a low of 120.60. It has broken short term major resistance 120.50 and is currently trading around 121.04. It confirms the continuation of bullish trend and jump till 121.80. On the downside minor support is around 120.50 and any break below will target 120/119.65(200 day HMA). The pair's minor resistance is around 121.20 and above that level it will reach 121.85/123. Option expiries at 119.75 (308M), 121.00 (550M)
AUD/USD reached 0.7692 during late Asian session, its lowest since February 12; however, it later consolidated at 0.7693. On the downside, support is seen at 0.7641 levels (Feb 12 low). On the upside, resistance is located at 0.7792 levels (Feb 13 high). Option expiries at 0.7700 (1.1BLN), 0.7735 (250M)
USD/CHF trades lower at 0.9832 levels, inching closer to 0.98 handle. The US dollar came under pressure as traders booked profits on Monday, from its rally seen on Friday. However, the bearish bias in the pair may be temporary as the Swiss franc continues to weaken as the SNB sells the nation's currency. On the topside, resistance is seen at 0.9900 levels and above which gains could be extended to 1.00 levels. On the flipside, support is located at 0.9802 levels and further below at 0.9750 levels.
GBP/USD is currently trading around 1.5072 after making a low of 1.5020. The pair is facing psychological support around 1.5000 and any break below will target 1.4950/1.4825. On the upside minor resistance is around 1.5125 (9 day 4HMA) and any break above will take the pair to 1.5160/1. expiries at 1.5210-25 (240M), 1.5250 (259M)
