Global Markets:

  • Australia Investment Lending for Homes (FEB): 4.4%, Previous: -3.3%
  • Australia Home Loans (m/m): 2.3%, Expected: 2.0%, Previous: 0.0%
  • Australia Westpac Consumer Sentiment: 0.3%, Previous: -0.7%
  • United Kingdom BRC Shop Price Index (MAR) (m/m): -1.7%, Previous: -1.4%
  • New Zealand NZ Card Spending (MAR) (m/m): -0.2%, Previous: 0.6%
  • New Zealand Electronic Card Retail Sales (y/y): 5.1%, Previous: 5.7%
  • The Nikkei is down 2 % on the day, while Hong Kong’s Hang Seng and Australia’s ASX are both up more than 1 % as of 05:00 GMT
  • Gold is trading at $1312 (+0.30 %), Silver at $20.06 (+0.05 %)
  • US 10 year yield stands at 2.69

FX Flows/Orders:

  • Decent offers in front of 1.3820 in EUR/USD; large stops resting above and through 1.3830
  • 1.3750 now intraday support, stops from short-term specs through 1.3740, then better bids at 1.3720
  • GBP/USD – 1.6680 now pivotal s/t support; profit-taking supply pre-1.6820 (2014 high)
  • AUD/USD – bids from leveraged funds building 0.9320-30; topside, offers ahead of 0.94 barrier option
  • USD/JPY – Demand from Japanese names led to a small bounce; offers lined up at 102.20 and in better size 102.45/50, while bids rebuilding around the 101.50 level

Market Sentiment:

Dealers note that there has been large USD selling across the board from leveraged names as well as real money funds (unleveraged asset managers like pension/mutual funds). Most blame this on the BoJ meeting yesterday, which triggered a large liquidation of USD/JPY long position, while positioning for the upcoming FOMC minutes could be another reason. BoJ’s Kuroda wasn’t too dovish, saying that additional stimulus is not needed. However, the central bank’s statement was in line with market expectations, which made the large move in USD/JPY a bit surprising. US yields have decoupled from the USD/JPY and are holding well, while US stocks have bounced with the S&P 500 closing the day up 0.40 %.

Commodity currencies continue to be the outperformers, withstanding a risk-off bias in global equity markets and increasing geopolitical tensions. Further gains are likely and there are little risk events for this week after the FOMC minutes tonight. A test of the 2011 high at 0.8850 is possible in the Kiwi, while Aussie bulls are aiming for the 0.95 resistance level. USD/CAD is holding above 1.09 for now, but a break beneath will trigger further position covering and there is little technical support until 1.0735.

Strong Industrial & Manufacturing Production data out of the UK led to a sharpy rally in GBP/USD, up to 1.6754, while the rally in EUR/USD was mostly driven by short covering. EUR/USD remains a confusing pair to trade, so if someone wants to bet on Euro weakness, doing it through the cross pairs might be a better idea.

Upcoming Events:

  • 07:00 GMT – German Trade Balance (17.8B)
  • 07:00 GMT – Bank of Japan Monthly Report
  • 09:30 GMT – UK Trade Balance (-9.20B)
  • 19:00 GMT – FOMC Meeting Minutes