Global Markets:
- Asian stock markets: Nikkei up 0.85 %, Shanghai Composite fell 0.25 %, Hang Seng rallied 0.80 %, ASX 200 rose 0.40 %
- Commodities: Gold at $1272 (-0.05 %), Silver at $15.60 (+1.60 %), WTI Oil at $38.70 (+2.50 %), Brent Oil at $40.80 (+1.80 %)
- Rates: US 10 year yield at 1.95, UK 10 year yield at 1.54, German 10 year yield at 0.31
News & Data:
- New Zealand Business NZ Manufacturing PMI (Feb): 56.0 (prev rev 58.0)
- New Zealand Food Prices (MoM) Feb: -0.6% (prev 2.0%)
- New Zealand REINZ House Sales (YoY) Feb: 5.7% (prev 4.3%) -Median Prices Up 4.7% YoY
- Japan BSI Large All Industry (QoQ) Q1: -3.2 (prev 4.6)
- Japan BSI Large Manufacturing (QoQ) Q1: -7.9 (prev 3.8)
- Some Japanese Officials Call For JPY10tln Stimulus Package — RTRS
- PBoC Fixes Yuan At 6.4905 (prev 6.5127)
Markets Update:
The ECB cut rates and expanded its QE programme yesterday and the Euro fell initially, but Draghi’s comment that he doesn’t think that further rate cuts will be necessary led to a big short squeeze in the EUR/USD, which rallied from 1.0820 to a high of 1.1219. Overnight, the Euro retraced some of the recent gains and EUR/USD fell to a low of 1.1160. Support is now seen at 1.1140 and 1.1050.
GBP/USD followed the Euro higher yesterday, but ran out of momentum just ahead of the 1.4320 resistance level. Overnight, it fell to 1.4264 as the US Dollar caught a bid. Support can be expected at 1.4240 and 1.4190.
USD/JPY declined sharply yesterday as equities turned negative post-ECB, but it recovered slightly overnight as Asian equities rose. The pair rallied from 112.80 to a high of 113.50 and another test of 114.20 seems likely in the short-term.
The New Zealand Dollar has retraced some of the losses that occurred on Wednesday after the RBNZ rate cut, but it is likely to remain under pressure in the short-term. Resistance is seen at 0.6720 and then 0.6760.
Upcoming Events:
- 07:00 GMT – German CPI
- 08:00 GMT – Spanish CPI
- 09:00 GMT – Italian Industrial Production
- 09:30 GMT – UK Trade Balance
- 13:30 GMT – Canadian Employment Change
- 13:30 GMT – Canadian Unemployment Rate
