Global Markets:

  • Australia RBA Foreign Exchange Transaction (AUD) (MAR): 736M, Previous: 369M
  • Australia New Motor Vehicle Sales (m/m): -0.3%, Previous: 0.1%
  • Australia NAB Quarterly Business Confidence: 6, Previous: 8
  • China FDI: 5.50%, Previous: 10.40%
  • New Zealand ANZ Consumer Confidence Index 133.5 (132.0 prior)
  • New Zealand ANZ Consumer Confidence (MoM) 1.1% (-0.8% prior)
  • China’s Premier Li says growth can be a little higher or lower than 7.5%
  • China’s Premier Li says China is not considering strong stimulus now
  • BOJ’s Governor Kuroda says BOJ easing to continue until 2% inflation target is stable
  • New Zealand Finance Minister English says the New Zealand Dollar looks relatively high against the Australia and US dollar
  • France’s Economic Minister: France would like EZ countries to meet in order to discuss EUR strength and monetary policy

 FX Flows/Orders:

  • GBP/USD – at multi-year highs after breaking above 1.6820 in the early Asian session. Next major resistance seen at 1.6880 and then 1.7030/40. Solid bids at 1.6780 and 1.6720/30.
  • EUR/USD – very likely to stay in the current weekly range. Bids reported at 1.3790/95, while offer in good size ahead of 1.3880. 1.3865 seen as pivotal short-term resistance.
  • USD/JPY – hit into demand from speculators and Japanese importers sub-102.00; good buying interest noted from 101.50 down to 101.20; topside, offers at 102.40 + large stops reported above 102.50.

 Market Sentiment:

The UK unemployment rate fell from 7.2 % to 6.9 %, beating market expectations of 7.1 %. The continuous strength in UK econ data pushed GBP/USD towards the 1.6820 level, though it did not break above until a few hours ago in an illiquid Asian trading session. Further GBP gains are likely and it is worth keeping an eye on the cross pairs, especially GBP/CAD and GBP/NZD, as we could see some large moves there.

 US Industrial Production data came in higher than expected, at 0.7 % vs 0.5 % and February’s print was revised from 0.6 % to 1.2 %. The good IP data outweighed the slightly disappointing housing market data. Fed Chair Yellen’s speech was in line with previous statements and didn’t contain any surprises.

The Bank of Canada left interest rates unchanged at 1.00 % and maintains its neutral bias, though Governor Poloz mentioned that the bank cannot shut the door on rate cuts. USD/CAD reached a high of 1.1032 yesterday, but is now again consolidating around the 1.10 figure.

Looking ahead, no major data releases during the London session, but then we have US Initial Jobless Claims & Canadian CPI at 13:30 GMT, followed by the Philadelpia Fed Manufacturing Index at 15:00 GMT. Liquidity is likely to dry up towards the London close with many traders off tomorrow for the long weekend.

Upcoming Events:

  • 07:00 GMT – German PPI (-0.7 % YoY)
  • 13:30 GMT – Canadian CPI (1.0 % YoY)
  • 13:30 GMT – US Initial Jobless Claims (311k)
  • 15:00 GMT – US Philadelphia Fed Manufacturing Index (10.0)