Global Markets:

  • Japan National CPI (y/y): 1.6%, Previous: 1.5%
  • Japan Tokyo Core CPI (y/y): 2.7%, Expected: 2.8%, Previous: 1.0%
  • Asian markets are mixed this morning; solid US data boosted risk appetite, but tensions in Ukraine keep investors worried
  • The Nikkei is unchanged on the day as of 05:30 GMT, while Shanghai lost 0.20 %
  • The Hang Seng is down 1.50 % and Australian markets are closed for the ANZAC holiday
  • Gold at $1292 (+0.10 %)
  • US 10 year yield at 2.68

FX Flows and Sentiment:

  • AUD/USD – further position covering noted in yesterday’s London session and the pair eventually hit a fresh low of 0.9250 as US econ data came in stronger than expected. We have seen a small bounce since then, but selling interest remains solid ahead of the 0.93 level. Next key support is located at 0.9220, while a break of the 0.92 level would attract further momentum selling. Cross flows are mixed with steady AUD/NZD buying being supportive, but the stronger Yen triggering AUD/JPY sales.
  • EUR/USD – comments from ECB officials had once again no large effect and it seems the only thing that can bring the pair out of this tiny range is the CPI data next week. With volatility so low, interest in the EUR/USD remains small. Bids are reported between 1.38 and 1.3780, while stops in large size building through 1.3775. To the topside, leveraged names continue to have selling interest around the 1.3850 level, while 1.3880 is the nearest key resistance level.
  • EUR/JPY – back to range trading mode. Bidding interest ahead of 141.00 looks to be solid, while supply seen towards 142.00. Stops are building on both sides of the range in decent size.
  • GBP/USD – remains well-bid and it is likely the pair will print a fresh multi-year high soon. Good buying interest towards 1.6750 from various names, while short-term specs are placing stops through 1.6740. To the topside, 1.6840 is the obvious resistance level, but after that, not much until 1.70. Cross flows are positive overall with the commodity currencies weakening, but GBP/JPY position covering from longs noted during the past few sessions.
  • NZD/USD – the pair fully retraced the post-RBNZ rally late Wednesday and briefly traded sub-0.8550 yesterday. The Kiwi looks increasingly fragile as the RBNZ expressed more concerns about the overvalued currency in their latest statement. Key support at 0.8500-10; a break below would pave the way for a deeper retracement towards 0.8350.
  • USD/CAD – staying bid amid good US data and overall pressure on commodity currencies, including the Loonie. Bids solid towards 1.10, while offers seen at 1.1050 and 1.1070/75.
  • USD/JPY – banks are reporting solid two-way flows which are keeping the pair in a small range. Exporters are sellers, while leveraged names have been buyers. Keep an eye on headlines out of Ukraine as increased tensions could lead longs to cover their positions. Large stops beneath 102.00 & momentum selling expected on a break of the level.

Upcoming Events:

  • 09:30 GMT – UK Retail Sales (-0.4 % MoM, 3.8 % YoY)
  • 14:55 GMT – US Michigan Consumer Sentiment (83.0)