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Intermarket:
• SP Futures 3945 (-0.06%)
• EUSTXX 3859 (-0.34%)
• Crude Oil 60.58 (+0.50%)
• US 10YR 1.73% (+1.20%)
• EurUsd 1.1709 (-0.05%)
• UsdJpy 110.85 (+0.46%)
• DAX 14969 (-0.43%)
Risk appetite is slightly weaker into today’s European open, following the soft close in the US yesterday, and a rather soft Asia session. US 10YR yield is steady, USD firm, Gold still down and Oil up ahead of tomorrow’s OPEC meeting. Big losses at Credit Suisse, Nomura, Mitsubishi due to Archegos seem to have not spooked the market as of yet.
The rise in yields may be the market’s attempt to discount further stimulus from President Biden’s infrastructure plans (to be revealed today). Beyond that, it’s quarter-end so tread carefully.
Covid-19 divergence plays continue: UK numbers continue to drop, and 40% of the country has had the jab in stark contrast with Europe, with France, Germany and Italy still seeing rising numbers. To note, Germany suspended AstraZeneca for under-60s on blood clot issues. Europe may reach out to Russia, to introduce Sputnik.
ECB speak today expected to emphasize importance of policy continuity. Overnight, BOJ Governor Kuroda talked up rate cuts as an effective policy option.
Matters that Matter:
•’Optimistic’ Fed policymakers see U.S. economy about to boom
• Biden to announce infrastructure plan today, could fund projects over 8 years -sources
• Archegos losses tallied up: Mitsubishi may be facing 300Mln in losses.
• CN Mar NBS Manufacturing PMI, 51.9, 51.0 f’cast, 50.6 prev
• CN Mar NBS Non-Mfg PMI, 56.3, 51.4 prev;
• RBNZ eases dividend curbs on lenders as economy improves
• New Zealand business confidence slips in March
• OPEC+ panel says uncertainties may impact oil demand recovery
• The Guardian: Queensland lockdown decision to be made 9 am tomorrow; Premier says the decision on lockdown will be announced at 9 am tomorrow but things are “looking positive”.
• Germany may suspend AstraZeneca Vaccines to people under 60 due to rare blood clots.
• New lockdowns in Ruili (China) as Coronavirus cases spike.
Majors 1-Day View:
USDJPY
- Prices posted a 5th higher daily low on Tuesday, with gains of ¾ Big Fig. As such, readings remain extended at multiple levels and caution is advised. Buying into pullbacks towards 110.00 is the better option.
- Test of 111.00 with option KOs imminent
- 112.00 also holds barriers
- Support at 110.00 with massive expiries today.
EURUSD
• Prices traded lower yet again on Tuesday, reaching 5 month lows. Signals are reaching extended levels, so caution is advised, but the outlook remains bearish.
• USD strength weighs
• Quarter-end flows likely to impact in NorAm trade.
AUDUSD
• Prices posted a bearish outside day on Tuesday, with signals turning back to a bearish stance for today.
• Prices heavy on USD strength.
• .7650 resistance, .7560s support.
GBPUSD
• Prices interrupted the brief sequence of higher daily lows on Tuesday, posting losses of ¾ Big Fig. Buyers returned into the close, with limited net movement on the day, but on balance signals still remain bearish for today.
• Prices heavy on USD strength.
• Employers turning more confident about hiring.
FX Relative ATR Grid
Comment: Volatility remained largely subdued on Tuesday, with the exception of USDJPY. Especially with quarter-end, this slowdown in volatility would suggest a more cautious approach.
Relative Strength Grid
Comment: The strongest trends are in USD (bullish), NZD (bearish), EUR (bearish). The strongest momentum was seen yesterday in USD (bullish), JPY (bearish).