Market Roundup
- Fed's Mester says some parts of the equity market have been "bubble-like".
- Federal Reserve's Bullard says dollar is not far from its "fair value"; Grexit possible but would not be advisable, would be bleak for Greece.
- Bank of Italy Governor Visco says state intervention could help develop market for sale of bad loans, free up resources.
- ECB's Noyer says bond buying may be perceived creating moral hazards if governments do not show fiscal discipline.
- BOJ Gov Kuroda: Told PM Abe that economy remains on gradual recovery path; no change in medium to long-term price trend.
- Japan govt's March report upgrades view of economy for 1st time in 8 months.
- Swiss sight deposits at 376.503 bln sfr in week ending march 20 versus 378.797 bln a week earlier.
Economic Data Ahead
- (0830 EDT/1230 GMT) Chicago Fed National Activity Index (Feb) previous 0.13
- (1000 EDT/1400 GMT) US Existing Home Sales (Feb) consensus 4.95 mln SAAR, previous 4.82 mln SAAR
- (1100 EDT/1500 GMT) Eurozone Mar consumer confidence index - flash, -5.95 expected; previous -6.70
Key Events Ahead
- N/A German Chanc Merkel, Greek PM Tsirpas meeting in Berlin
- N/A Cleveland Fed Mester, ECB/BdF Noyer speak at Paris conference
- (0600 EDT/1000 GMT) FRB Cleveland's Mester on Bloomberg TV
- (1000 EDT/1400 GMT) ECB Pres Draghi parliamentary testimony
- (1130 EDT/1530 GMT) Federal Reserve Vice Chair Fischer addresses Economic Club of New York; NYC
- (1145 EDT/1545 GMT) FedTrade 30-year Fannie Mae / Freddie Mac (max $1.875 bln)
- (2200 EDT/0200 GMT) FRB San Francisco's Williams on the economic outlook; Sydney
FX Recap
The USD has pulled back post the FOMC and it is hard to see what will drive a move today out of recent ranges. The weak side is probably still for further USD weakness due to positioning, although the USD long has been paired back, with the commodity currencies looking constructive in the short term due to Oil and Copper staging significant rallies into the end of last week.One should see follow through to the next as the USD correction develops.
EURUSD broke above the 1.0800 handle and is hovering at 1.0855 levels. It seems to have already overcome last week's FOMC meeting. Support is seen at 1.0715/1.0690 - 1.0590 - 1.0455 and resistance is located at 1.0945/55 - 1.1065/80 - 1.1175/1.1210. Expected strengthening favours the pair's short-covering.
GBPUSD recovered partial losses and found support at 1.4837 levels. The pair's minor resistance is around 1.4950-60 (Support turned into resistance). Any break above 1.4960 could pave way for next target 1.5050/1.5125. Overall trend reversal can happen only if it closes above 1.5160 levels. On the downside minor support is around 1.4800 and any break below will drag the pair further down till 1.4690/1.4630.
AUD/USD touched 0.7834 during late Asian session, its highest since March 18 and trades around 0.7794 levels at present. It is expected to find support at 0.7638 levels, the low of March 20 and resistance at 0.7912, the high of February 26. The US dollar stayed under pressure with rising uncertainty over U.S. monetary policy stance after the central bank downgraded its forecasts for growth and inflation, along with lowering its interest rate projections last week.
USD/JPY moved back above 120.00 levels in early European session, and currently trades at 119.82 levels. The US dollar lost momentum across the board after U.S. Federal Reserve official Bullard 's comments that if the central bank waits long to hike rates, it would necessitate more aggressive rate hike in the future. On the topside, immediate resistance is seen at 120.22 levels, and then at 120.50 levels. On the flipside, support is located at 119.66 levels and 119.38 levels.
USD/CAD was boosted to an intra-day high of 1.2615 on falling oil prices. The following low water-mark is at 1.2573 levels. BoC Governor Poloz and deputy governor Lane are scheduled to speak later this week. The next BoC meeting is to be held on Apr 15. Support is located at 1.2485/50 - 1.2390/50 - 1.2265/55 and resistance 1.2690/1.2705 - 1.2810/40 - 1.3000/1.3065.
