Global Markets: 

  • Asian stock markets: Nikkei down 1.10 %, Shanghai lower 0.50 %, Hang Seng lost 0.75 %, ASX declined 0.20 %
  • Commodities: Gold at $1290 (+0.40 %), Silver at $19.85 (+0.10 %), Crude Oil at $97.50 (+0.10 %)
  • Rates: US 10 year yield at 2.48 

News & Data: 

  • New Zealand Employment Change MoM 0.4 % vs 0.7 % f/c – YoY 3.7 % vs 4.0 % f/c
  • New Zealand Unemployment Rate 5.6 % vs 5.8 % f/c
  • New Zealand Participation Rate QoQ 68.9 % vs 69.3 % f/c
  • RBNZ: Pleased with downward correction in exchange rates
  • RBNZ: Prepared to intervene if NZD doesn’t fall further as export prices weaken more
  • Global equity markets tumble on Ukraine tensions (RTRS)
  • Putin orders government to respond to US & European sanctions (BBG)
  • Poland said a renewed buildup of Russian troops on Ukraine’s border raises the specter of possible invasion (BBG) 

FX Update: 

  • AUD – AUD/USD started the Asian session near 0.93 and didn’t move much further. There was a brief drop to 0.9290 at the Tokyo open, but this was met with demand from local exporters. Cross flows were supportive with AUD/NZD rallying back above 1.10. Sentiment remains negative overall, but further consolidation between 0.9270 and 0.9330 seems likely ahead of the Australian employment data tomorrow. It’s also worth noting that there is a 0.93 $1.3 billion option expiry for today’s NY cut (10:00 NY, 15:00 London), which could keep the price close to the big figure throughout the day. Dealers in Asia report stops building through 0.9285 and 0.9260 in good size. The selling interest towards 0.9350 is said to have weakened and stops start at 0.9355.
  • CAD – USD/CAD broke above the 1.0950/60 resistance area yesterday and managed to close the day there. Dealers saw some profit-taking flows up there, but leveraged names continue to have on good buying interest and any larger dip will be well bid. Bids are building at 1.0940 and in better size from 1.0920 down to 1.0910. Trailing stops starting at 1.0935 and in good size sub-1.09. To the topside, the obvious resistance level is now 1.10 and offers are resting ahead of the level.
  • NZD – NZD/USD rallied initially as the unemployment rate decreased to 5.6 % vs 5.8 % expected. However, employment change and participation rate numbers disappointed and the Kiwi fell from 0.8425. Falling milk prices and a warning from the RBNZ about possible intervention added to the negative sentiment. NZD/USD consolidated in a 10 pips range after the Tokyo open and flows were light. The pair is likely to remain offered throughout the day. Intraday resistance at 0.8450 and then 0.8475. 

Upcoming Events: 

  • 06:00 GMT – German Facttory Orders (1.1 %)
  • 07:15 GMT – Swiss CPI (-0.4 % MoM, 0.0 % YoY)
  • 08:30 GMT – UK Manufacturing Production (0.6 % MoM, 2.1 % YoY)
  • 08:30 GMT – UK Industrial Prdouction (0.8 % MoM, -1.1 % YoY)
  • 09:00 GMT – Italian GDP (0.1 % QoQ, 0.1 % YoY)
  • 12:30 GMT – US Trade Balance (-44.9B)