Global Markets:

  • New Zealand (NZD) ANZ Commodity Price (MAR): -0.1%, Previous: 0.9%
  • Japan (JPY) Monetary Base (y/y): 54.8%, Previous: 55.7%
  • Australia (AUD) Building Permits (m/m): -5.0%, Expected: -2.5%, Previous: 6.8%
  • Asian markets are up this morning as risk appetite is strong
  • The Nikkei gained 1.60 %, Shanghai Composite rose 0.40 % and Australia’s ASX is 0.25 % higher
  • Gold at $1283 (+0.20 %), Silver at $19.78 (+0.50 %)
  • US 10 year yield stands at 2.768

FX Flows/Orders:

  • Dealers reported larger bids from local names (mining companies) between 0.9220 and 0.9230 in AUD/USD, which supported the pair in the overnight session
  • Stops in good size just beneath; next key support at 0.9180
  • AUD/NZD rallied almost 100 pips in the past 24 hours; it has paused just ahead of the 1.0758 resistance, but a break above pavest the way for a move back to 1.09
  • In EUR/JPY, there are profit-taking offers in good size ahead of the 143.80 resistance level
  • Dips are shallow; bids are clustered between 142.50 and 142.60; trailing stops through 142.80 and in larger size sub-142.50
  • USD/JPY reached a session high of 103.92 earlier; supply from Japanese exporters has capped the topside so far, more offers at 104.20 and towards 104.50
  • Macro funds and other leveraged names were good buyers during the past few sessions; bids now seen accumulating around 102.50 and in larger size 102.10-20

Market Sentiment:

 The Euro strengthened yesterday on solid data out of the Euro Zone countries and is now consolidating around 1.38. Dealers reported high turnover, but the tight ranges during the past few sessions suggest there are strong two-way flows ahead of the ECB meeting. 1.37 is the key level to the downside, while 1.3880 is noted as next major resistance area. Cross flows were supportive with solid demand for EUR/GBP and EUR/JPY from leveraged names. Looking ahead, we have the EZ GDP and PPI releases, but it is unlikely we will see any larger moves in EUR/USD ahead of the central bank meeting tomorrow. EUR/JPY should provide better intraday opportunities.

 Sterling tumbled after Manufacturing PMI data disappointed. GBP/USD is looking increasingly fragile on the hourly charts and another weak data print in form of the Construction PMI at 09:30 GMT would likely lead to a test of the 1.6570 level. A stronger number could pave the way for a retest of the 1.6680 level, with key resistance now seen at 1.6720.

 The New Zealand Dollar has been trading with an offered tone since the Fonterra Global Dairy Trade auction results; prices fell 8.9 %, which marks the fourth consecutive decline. One of the NZ banks notes that the latest result gives them comfort for their core view that declining commodity prices over 2014 should apply downward pressure to the NZD.

Upcoming Events:

  • 08:00 GMT – Spanish Unemployment Change (-5.3k)
  • 09:00 GMT – Norwegian Unemployment Rate (3.6 %)
  • 09:30 GMT – UK Construction PMI (63.0)
  • 10:00 GMT – Euro Zone GDP (0.3 % QoQ, 0.5 % YoY)
  • 10:00 GMT – Euro Zone PPI (-0.1 % MoM, -1.6 % YoY)
  • 13:15 GMT – US ADP Non-Farm Employment Change (195k)
  • 15:00 GMT – US Factory Orders (1.2 % MoM)