Global Markets:

  • Asian stock markets: Nikkei up 0.10 %, Shanghai Composite gained 1.85 %, Hang Seng rose 0.40 %, ASX declined 0.30 %
  • Commodities: Gold at $1160 (+0.65 %), Silver at $15.71 (+1.40 %), WTI Oil at $46.62 (-0.95 %), Brent Oil at $54.59 (-0.80 %)
  • Rates: US 10 year yield at 2.088, UK 10 year yield at 1.701, German 10 year yield at 0.259

News & Data:

  • UK House Price Index 1.0 %, Previous: 2.1 %
  • Australia New Car Sales 2.9 %, Previous: -1.5 %
  • China 2015 Copper Demand To Grow By 4.2% This Year — CICC
  • Shanghai Composite Index At Highest Level Since 2009
  • NZIER Lower New Zealand 2015-16 Growth Outlook To 2.9% — BBG
  • New Zealand FinMin English: Macro prudential Tools Have Proved Ineffective So Far
  • ECB’s Visco Warns Against Excessive Optimism On The QE

CFTC Positioning Data:

  • EUR shorts at 181.073K vs. 172.389K shorts prior week
  • CAD shorts at  39.030K vs. 38.863K shorts prior week
  • JPY shorts at 59.387K vs. 52.521K  shorts prior week
  • CHF shorts at 8.380K vs. 6.062K shorts prior week
  • AUD shorts at 76.851K vs. 61.545K shorts prior week
  • GBP shorts at 32.591K vs. 26.908K shorts prior week

Markets Update:

Asian stock markets are higher this morning, led by gains in the Shanghai Composite. Chinese equities rose amid speculation of further easing measures by China. Meanwhile, global yields declined slightly, while Oil prices fell to fresh lows amid renewed oversupply concerns. In the FX market, the USD weakened, but dealers blame profit-taking flows and note that demand for EUR and GBP still remains weak overall. However, we could see some further position covering from USD longs ahead of the FOMC meeting on Wednesday, especially given the extreme moves in the past 7 trading days.

EUR/USD has immediate support at 1.0460, while key resistance now seen at 1.0640 and then 1.0680. GBP/USD is moving higher into the European open, but a clear break above 1.4850 will be needed to trigger a larger short squeeze. USD/JPY remains quiet for now, and it is likely it will continue to trade within a 120.60-121.80 range ahead of the FOMC meeting.

AUD/USD is still relatively well bid given the broad USD strength, with 0.7570 now key support. Next resistance eyed at 0.7730. NZD/USD closed the week above the 0.73 level and techs suggest we’ll see another test of 0.7440 in the near-term. Meanwhile, USD/CAD is still strong amid declining Oil prices and unless the FOMC surprises the market by being less hawkish than expected, the outlook for the Canadian Dollar remains negative.

Upcoming Events:

  • 08:15 GMT – Swiss Retail Sales (2.6 % y/y)
  • 08:15 GMT – Swiss PPI (0.4 % m/m)
  • 09:00 GMT – Spanish Trade Balance (-€1.95bln)
  • 12:30 GMT – US NY Empire State Manufacturing Index (8.0)
  • 13:15 GMT – US Industrial Production (0.2 % m/m)
  • 13:15 GMT – US Manufacturing Production (0.1 % m/m)
  • 14:00 GMT – US NAHB Housing Market Index (56)
  • 14:00 GMT – ECB's Costa speaks
  • 18:45 GMT – ECB President Draghi speaks

The Week Ahead (Key Data Releases & Events):

Tuesday, March 17th

00:30 GMT – RBA Meeting minutes

03:00 GMT – Bank of Japan Rate Decision (0.10 %)

06:30 GMT – Bank of Japan Press Conference

10:00 GMT – German ZEW Current Conditions (51.0)

10:00 GMT – German ZEW Economic Sentiment (58.7)

10:00 GMT – Euro Zone CPI (0.6 % m/m, -0.3 % y/y)

10:00 GMT – Euro Zone Core CPI (0.6 % y/y)

10:00 GMT – Euro Zone ZEW Economic Sentiment (58.2)

12:30 GMT – US Housing Starts (1.05mln, -2.4 % m/m)

12:30 GMT – US Building Permits (1.065mln, -0.5 % m/m)

12:30 GMT – Canadian Manufacturing Sales (-1.0 % m/m)

21:45 GMT – New Zealand Current Account (-NZ$3.15bln q/q, -NZ$7.88bln)

Wednesday, March 18th

01:30 GMT – Chinese House Prices

09:00 GMT – Italian Trade Balance (€4.32bln)

09:30 GMT – UK Claimant Count Change (-30k)

09:30 GMT – UK Unemployment Rate (5.6 %)

09:30 GMT – UK Average Earnings (2.2 %)

09:30 GMT – Bank of England MPC Meeting Minutes

10:00 GMT – Euro Zone Trade Balance (€21.1bln)

12:30 GMT – Canadian Wholesale Sales (2.1 % m/m)

18:00 GMT – FOMC Statement

18:30 GMT – Fed Chair Yellen speaks

21:45 GMT – New Zealand GDP (0.7 % q/q, 3.3 % y/y)

Thursday, March 19th

07:00 GMT – Swiss Trade Balance (CHF2.87bln)

08:30 GMT – Swiss National Bank Rate Decision (-0.75 %)

08:30 GMT – SNB Chairman Jordan speaks

09:00 GMT – Norges Bank Rate Decision (1.00 %)

12:30 GMT – US Initial Jobless Claims (297k)

12:30 GMT – US Current Account (-$103.6bln)

14:00 GMT – US Philadelphia Fed Manufacturing Index (7.4)

Friday, March 20th

07:00 GMT – German PPI (0.2 % m/m, -1.9 % y/y)

12:30 GMT – Canadian Core CPI (0.5 % m/m, 2.1 % y/y)

12:30 GMT – Canadian CPI (0.7 % m/m, 0.9 % y/y)

12:30 GMT – Canadian Retail Sales (-0.3 % m/m)

12:30 GMT – Canadian Core Retail Sales (0.1 % m/m)