Tuesday 10th March: European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.80 %, Shanghai Composite lost 0.10 %, Hang Seng declined 0.60 %, ASX is up 0.05 %
  • Commodities: Gold at $1160 (-0.50 %), Silver at $15.70 (-0.50 %), WTI Oil at $50.15 (+0.30 %), Brent Oil at $58.58 (+0.20 %)
  • Rates: US 10 year yield at 2.195, UK 10 year yield at 1.934, German 10 year yield at 0.313

News & Data:

  • Australia NAB Business Confidence 0.0, Previous: 3.0
  • Australia NAB Business Survey 2.0, Previous: 2.0
  • China CPI 1.2 % m/m, Expected: 0.8 %, Previous: 0.3 %
  • China CPI 1.4 % y/y, Expected: 0.9 %, Previous: 0.8 %
  • China PPI -4.8 % y/y, Expected: -4.3 %, Previous: -4.3 %
  • UK BRC Retail Sales Monitor 0.2 %, Expected: 0.4 %, Previous: 0.2 %
  • NAB: 40% Chance RBA Cash Rate Goes Below 2.00%
  • Fed’s Fisher: Dollar Strength Reflects Confidence in US
  • Fed’s Fisher: Fed Should Raise Rates Early Then Move Gradually, Rather Than Moving Later And Steeply
  • Fed’s Fisher: ‘Dangerous’ For Fed To Wait For Faster Wage Growth
  • Fed’s Fisher: Headline Inflation Will Bounce Back When Energy Prices Stabilize
  • PBoC Advisor: No Risk Of China Hard Landing, Economy IS Stabilising & Improving

Markets Update:

The US Dollar extended gains overnight with USD/JPY reaching a fresh multi-year high. Dealers report that leveraged names and momentum names continue to have good demand for the pair and the option barriers are barely any obstacle. However, they did also note that Japanese traders are rather wary of buying USD/JPY at those levels as they expect comments from officials regarding the recent JPY weakness. Looking at the charts, the next major resistance lies at the 2007 high at 124.13.

USD/CHF also remains very well bid and the pair had almost only up days after the SNB decision on January 15th led to the drop to 0.83. Resistance seen at the psychological level at 1.00, but not much in the way of a 1.02 test in the near-term. Meanwhile, the Euro is not getting any rest. QE started yesterday, which sparked demand for German bonds and added additional pressure on the EUR. Immediate support seen at 1.0750, but then not much until 1.05.

In AUD/USD, 0.7620/25 support (January low) held so far, but is looking increasingly vulnerable. Similar price action in NZD/USD, which dropped below 0.73 overnight. However, the NZD might consolidate in the near-term as traders are waiting for the RBNZ rate decision in two days.

Upcoming Events:

  • 06:45 GMT – Swiss Unemployment Rate (3.2 %)
  • 07:45 GMT – French Industrial Production (-0.3 % m/m)
  • 08:00 GMT – Spanish Retail Sales (2.4 % y/y)
  • 09:00 GMT – Italian Industrial Production (0.2 % m/m, 0.1 % y/y)
  • 09:00 GMT – Norwegian CPI (0.7 % m/m, 2.1 % y/y)
  • 14:00 GMT – US JOLTs Job Openings (5.03mln)
  • 14:35 GMT – Bank of England Governor Carney speaks
  • 18:30 GMT – Bank of England MPC Member McCafferty speaks
  • 22:05 GMT – RBA Assistant Governor Kent speaks

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