Market Brief
All quiet in the FX market. Wall Street ended the day in positive ground while traders digested the minutes of the last FOMC meeting. Most US equity indexes depreciated sharply on the minutes release before bouncing back to their initial level; the S&P 500, Dow Jones and NASDAQ were up by 0.27%, 0.15% and 0.83% respectively. The dovish minutes revealed that the probabilities of a rate hike in June have diminished considerably as several members of the committee thought a progressive tightening wouldn't be guaranteed until later in the year or even in early 2016. More specifically, a few Federal Reserve officials are concerned that low oil prices and strong USD would likely hold inflation down. oil prices took another hit yesterday and erased gains from last week. WTI is down 3.48% while its counterpart from the North Sea dropped 3.60% to 56.07. Pressure on oil prices shows no signs of weakness as US oil inventories rose 10.95mn barrels last week. EUR/USD is moving with a downward bias and is getting closer to its key support area of 1.0713/55 (low from March 31st and Sept. 2003, Fib 38.2% from March USD selloff) while the hourly RSI indicates the dollar is closed to be overbought. A break of 1.0713 would open the road to further USD appreciation. The next supports lie at 1.0685 and 1.0598 (Fib 38.2% and 23.6% respectively).
In Asia, the Nikkei 225 consolidated gains from the previous session while the Hang Seng appreciated sharply to a max of 14,380, its highest level since November 2010, before stabilizing around 13,800. The rally was due to investors from mainland flooding into Hong Kong. On the short-term, USD/JPY is moving sideways as it get closer to the high from 2 days ago. On the long-term, the targets are 122.03 then 124.12, highs from March 13th and June 2007 respectively, however fresh boost would be needed to clear these levels.
In Europe, traders will be watching Halifax House Price from UK, BoE interest rate decision (11am GMT). Initial Jobless Claims in the US and New Housing Price Index from Canada this afternoon. Across the channel, EUR/GBP is stuck in its declining channel and tries to break the 0.7222/30 key support area while the cable erased gains from yesterday and is trading around 1.4860 this morning, getting closer to its nearest support of 1.4803 (low from April 7), next support stands at 1.4761 (hourly Fib 23.6% from mid-March) . The UK elections are weighting on the sterling as traders object to taking directional positions and seem to favor waiting until the end of the elections to take more risk.
| Today's Calendar | Estimates | Previous | Country / GMT |
|---|---|---|---|
| DE Feb Trade Balance ex Ships | - | 8.5B | DKK / 07:00 |
| DE Feb Current Account Balance | - | 10.0B | DKK / 07:00 |
| UK Mar Halifax House Prices MoM | 0.10% | -0.30% | GBP / 07:00 |
| UK Mar Halifax House Price 3Mths/Year | 8.20% | 8.30% | GBP / 07:00 |
| DE Feb Current Account (Seasonally Adjusted) | - | 11.3B | DKK / 07:00 |
| SW Mar Budget Balance | - | 37.1B | SEK / 07:30 |
| SW Feb Household Consumption (MoM) | 0.30% | 1.90% | SEK / 07:30 |
| SW Feb Household Consumption (YoY) | - | 2.90% | SEK / 07:30 |
| UK Feb Visible Trade Balance GBP/Mn | -£9'000 | -£8'412 | GBP / 08:30 |
| UK Feb Trade Balance Non EU GBP/Mn | -£2'000 | -£1'745 | GBP / 08:30 |
| UK Feb Trade Balance | -£1'500 | -£616 | GBP / 08:30 |
| UK Apr BOE Asset Purchase Target | 375B | 375B | GBP / 11:00 |
| UK avr..09 Bank of England Bank Rate | 0.50% | 0.50% | GBP / 11:00 |
| CA Feb Building Permits MoM | 3.30% | -12.90% | CAD / 12:30 |
| CA Feb New Housing Price Index MoM | 0.10% | -0.10% | CAD / 12:30 |
| CA Feb New Housing Price Index YoY | 1.40% | 1.40% | CAD / 12:30 |
| US avr..04 Initial Jobless Claims | 283K | 268K | USD / 12:30 |
| US mars.28 Continuing Claims | 2350K | 2325K | USD / 12:30 |
| US Bloomberg April United States Economic Survey | - | - | USD / 12:45 |
| US avr..05 Bloomberg Consumer Comfort | - | 46.2 | USD / 13:45 |
| US Feb Wholesale Inventories MoM | 0.20% | 0.30% | USD / 14:00 |
| US Feb Wholesale Trade Sales MoM | 0.30% | -3.10% | USD / 14:00 |
Currency Tech
EUR/USD
R 2: 1.1280
R 1: 1.1043
CURRENT: 1.0784
S 1: 1.0768
S 2: 1.0613
GBP/USD
R 2: 1.5166
R 1: 1.4994
CURRENT: 1.4867
S 1: 1.4635
S 2: 1.4547
USD/JPY
R 2: 122.03
R 1: 120.50
CURRENT: 120.20
S 1: 118.33
S 2: 117.93
USD/CHF
R 2: 0.9984
R 1: 0.9812
CURRENT: 0.9680
S 1: 0.9491
S 2: 0.9450