Market Roundup
- Sterling hits 4-week low of $1.519.
- Euro falls to 11-1/2 year low vs dollar, down 0.5 percent on day at $1.0980.
- Greek central bank chief says Greek banks are fully recapitalised, no problem with deposits; upcoming Eurogroup meeting on Monday to be successful.
- Greece pays first instalment of 310 mln euros due Friday as part of IMF March loan repayment.
- Fitch: Costs to sovereigns via default on bonds held by the ECB, and by the bank of Greece on its target 2 obligations, would be manageable; Grexit remains possible, but systemic crisis unlikely.
- European Union Q4 GDP revised qq stays flat at 0.3 % (consensus 0.3 %) vs previous 0.3 %.
- Italy Jan Producer Prices mm decreases to -1.1 % vs previous -0.7 %.
- France Jan Exports decreases to 36.849 bln eur vs previous 37.806 bln eur (revised from 37.900 bln eur).
- France Jan Imports decreases to 40.575 bln eur vs previous 41.102 bln eur (revised from 41.400 bln eur).
- Germany Jan Industrial Output mm increase to 0.6 % (consensus 0.5 %) vs previous 0.1 %.
- Japan Jan Leading Indicator decrease to -0.2 vs previous 1.5.
- Net public satisfaction with BOE +35 in Nov vs +29 in Nov (highest since May 2007).
- UK inflation expectation for year ahead 1.9% Feb vs 2.5% Nov, 2 yrs ahead 2.1% Feb vs 2.5% Nov.
- Swiss National Bank reports gain on gold valuation of 4.1 bln sfr; profit from forex positions of 34.5 bln sfr; profit of 38.3 bln sfr for 2014 vs 9.1 bln loss year-ago.
Economic Data Ahead
- (0830 ET/1330 GMT) US Nonfarm Payrolls (Feb) consensus +240k, previous +257k
- (0830 ET/1330 GMT) US Private Payrolls (Feb) consensus +229k, previous +267k
- (0830 ET/1330 GMT) US Manufacturing Payrolls (Feb) consensus +12k, previous +22k
- (0830 ET/1330 GMT) US Unemployment Rate (Feb) consensus 5.6%, previous 5.7%
- (0830 ET/1330 GMT) US Average Hourly Earnings (Feb) consensus +0.2%, previous +0.5% m/m
- (0830 ET/1330 GMT) US Average Workweek (Feb) consensus 34.6 hours, previous 34.6 hours
- (0830 ET/1330 GMT) US International Trade Balance (Jan) consensus -$41.7 bln, previous -$46.6 bln
- (1500 ET/2000 GMT) US Consumer Credit (Jan) consensus +$14.5 bln, previous +$14.75 bln
Key Events Ahead
- (1100 ET/1600 GMT) CBO releases updated budget/deficit estimates, analysis of President's FY2016 proposals
- (1145 ET/1645 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.550 bln)
- (1330 ET/1830 GMT) FRB Dallas's Fisher (non-voter, hawk) on the economy
FX Recap
EUR/USD moved further south on Friday, and was hovering close to Thursday's 11-1/2 year lows as euro was underpinned by ECB President Mario Draghi's comments. It hit 1.1015 during late Asian session and later consolidated at 1.1019. Support is located at 1.0986, Thursday's low and an 11-1/2 year low and resistance is seen at 1.1187, the high of March 4. Option expiries at 1.1000 (2.74BLN), 1.1065-75 (2.2BLN), 1.1090-1.1100 (3.2BLN).
USD/JPY made a high of 120.40 and is slightly retreating from that level. Intraday trend is bullish as long as support 119.40 holds. On the upside break above 120.50 would pave the way for next target around 121/121.80. Overall bullish invalidation seen only below 118. The pair's minor support is around 119.40 (200 day HMA) and break below will target 118.60/118.20. It is good to buy at dips around 119.90 for the target of 121/121.75. Option expiries at 119.50 (630M), 120.00 (2.3BLN), 120.50 (1.7BLN), 121.00 (2.5BLN).
AUD/USD once again recovered after making a low of 0.7750. So it has formed temporary bottom around 0.7750 and jump till 0.7925 cannot be ruled out. The break of pair's minor support at 0.7750 would drag the pair further down till 0.7720/0.7695. The pair is expected to find resistance (R1) at 0.7845 and break above that level could take it to next resistance 0.7875/0.7920. Option expiries at 0.7750-60 (450M), 0.7815-25 (350M).
USD/CHF continued its uptrend and hit a new 7-week high at 0.9775. The pair pulled back earlier and found support at 0.9720 from where it bounced back and broke above 0.9750 (yesterday's high). The US dollar remains boosted ahead of the release of the Non Farm Payroll report in the US and is expected to weigh on the currency market. Option expiries at 0.9450 (440M), 0.9600-20 (300M).
GBP/USD has made a low of 1.5198 and is slightly retreating from that level. It should break 1.5180 (61.8% retracement of 1.4950 and 1.5512) for continuation of bear trend and below that it can reach till 1.5090/1.5050. On the upside short term resistance is around 1.5270 (200 day 4HMA) and any break of will target 1.5350/1.5380.
