Global Markets:

  • Bank of Japan keeps monetary policy unchanged; QE at 60-70 trillion JPY
  • Australia NAB’s Business Conditions (MAR): 1, Previous: 0
  • Australia NAB Business Confidence: 4, Previous: 7
  • Japan Current Account n.s.a.: 0.613T, Expected: 0.628T, Previous: -1.589T
  • New Zealand NZIER Business Confidence (Q1) (q/q): 52%, Previous: 52%
  • Asian markets are mixed as of 05:00 GMT with the Shanghai Composite gaining 1.30 % and Hang Seng up 0.90 %
  • However, the Nikkei is down almost 1 % and Australia’s ASX dropped 0.20 %
  • Gold is trading at $1301 (+0.25 %), Silver at $19.95 (+0.20 %)
  • US 10 year yield stands at 2.71

FX Flows/Orders:

  • EUR/USD – offers in larger size lined up between 1.3780 and 1.38; sizeable stops above 1.3820
  • To the downside, initial support seen at 1.3715, with 1.3670 being now the key short-term level
  • USD/JPY continues to trade with an offered tone, but buying from Japanese names has kept the pair once again supported on the latest dip towards 102.73; large bids towards 102.50 and it will not be easy to breach that level
  • To the topside, smaller offers at 103.30, better supply at 103.50
  • USD/CAD – Bids in front of 1.0950, but stops in good size just beneath + break below will trigger momentum selling
  • GBP/USD – Asia sees stops through 1.6570; offers from sovereign names around 1.6650

Market Sentiment:

The US Dollar remains under pressure as US yields are declining, while the Swiss Franc has gained as geopolitical tensions increased. The Japanese Yen didn’t move much on the Bank of Japan announcement, which was in line with market expectations, and the focus is now on the BOJ Press Conference, expected to begin at 07:30 GMT. Commodity currencies are still bid, with the New Zealand Dollar the outperformer. The market was caught short EUR/USD yesterday and comments from several ECB members helped to fuel the squeeze up to 1.3746.

 Key intraday support in AUD/USD at 0.9240/50 with confluences of technical support and solid bids reported in interbank market. Risk appetite has slightly decreased amid renewed tensions in Ukraine, but unless the situation escalates, the Antipodean currencies are likely to remain bid. A break of the aforementioned support area would pave the way for a test of 0.9200/10, which needs to hold in order to maintain short-term bullish momentum. Stop loss orders in large size are located sub-0.92 and would very likely trigger momentum selling. For now, buying dips towards 0.9210/20 with a stop located at 0.9175, for a move back to 0.93, is the preferred strategy.

 Upcoming Events:

  • Bank of Japan Press Conference (no set time, but expected to begin 07:30 GMT)
  • 06:45 GMT – Swiss Unemployment Rate (3.3 % n.s.a, 3.2 % s.a.)
  • 08:15 GMT – Swiss Retail Sales (0.9 % YoY)
  • 09:30 GMT – UK Industrial Production (0.3 % MoM, 2.2 % YoY)
  • 09:30 GMT – UK Manufacturing Production (0.3 % MoM, 3.1 % YoY)
  • 13:15 GMT – Canadian Housing Starts (192k)
  • 13:30 GMT – Canadian Building Permits (-3.0 % MoM)
  • 15:00 GMT – UK NIESR GDP Estimate
  • 18:30 GMT – FOMC Member Kocherlakota speaks
  • 19:45 GMT – FOMC Member Plosser speaks