Market Roundup
- Euro now lowest since April 2003, down 12 percent so far in 2015.
- Euro falls to new 12-year low of $1.0560.
- EUR/GBP makes another fresh 7-1/2 year low at 0.7020.
- AUD/USD makes another new 6 year low at 0.7588.
- ECB Draghi - Aware our policy measures may entail some financial stability risks, but these are contained; the slowdown in growth has reversed.
- China Stats Bureau: China economy remains resilient; downward pressure on economy intensified in Jan, Feb; slowdown in economy helping companies to upgrade, restructure.
- China Feb Industrial Output yy decreases to 6.8 % (consensus 7.8 %) vs previous 7.9 %.
- China Feb Retail Sales yy decreases to 10.7 % (consensus 11.7 %) vs previous 11.9 %.
- China Feb Urban Investment yy decreases to 13.9 % (consensus 15.0 %) vs previous 15.7 %.
- France Jan Current Account increases to -0.3 bln eur vs previous -1.9 bln eur.
- France Q4 Non-Farm Payrolls revised stays flat at 0.00 % vs previous 0.00 %.
- United Kingdom Jan Manufacturing Output yy decreases to +1.9 % (consensus 2.6 %) vs previous 2.4 %.
- United Kingdom Jan Industrial Output mm increases to -0.1 % (consensus 0.2 %) vs previous -0.2 %.
- United Kingdom Jan Manufacturing Output mm decreases to -0.5 % (consensus 0.2 %) vs previous 0.1 %.
- United Kingdom Jan Industrial Output yy increases to +1.3 % (consensus 1.3 %) vs previous 0.5 %.
Economic Data Ahead
- (1300 ET/1800 GMT) Federal Budget (Feb) consensus 187.0 bln deficit, previous $193.5 bln
Key Events Ahead
- (0945 ET/1445 GMT) FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.550 bln)
- (1000 ET/1500 GMT) BoE MPC Weale speech in London
- (1025 ET/1525 GMT) Riksbank DepGov Floden in Stockholm panel discussion
- (1045 ET/1545 GMT) FedTrade operation 30-year Ginnie Mae (max $875 mln)
- (1125 ET/1625 GMT) BoE Stewart speech at London conference
- (1500 ET/2000 GMT) RBNZ policy announcement, no change in 3.5% OCR expected
- (1630 ET/2130 GMT) Fed releases Comprehensive Capital Analysis and Review Results
FX Recap
EUR/USD continued losing ground and fell to new 12-year low of 1.0560 and is likely to face support at 1.05. On the upside, resistance is located at 1.1098 and a break above 1.1534 would suggest the end of the current downward trend. However, as of now it is highly unlikely. Option expiries at 1.0725 (3.2BLN), 1.0755 (458M), 1.0900 (880M)
USD/JPY pared partial gains but remained positive in the early European session and currently trades around 121.30 levels, after failing to break above the key resistance at 121.50 levels. On the topside, immediate resistance is located at 122.03 levels and a break above could push the pair to 122.57 levels. On the flipside, support is seen at 121 levels and then at 120.48 levels. Option expiries at 120.00 (1.3B), 120.50 (908M), 121.00 (765M), 122.00 (1.2B)
AUD/USD hit 0.7588 during late Asian session, its lowest since May 2009; however, it later consolidated to 0.7611, falling 0.16%. It is likely to find support at 0.7239 and resistance at 0.7710.
USD/CHF broke above the 1.00 handle in mid-European trading reaching its highest level since the SNB discontinued its cap against the euro. The recent rally has been driven largely by strengthening of the US dollar and as expectations of mid-year rate hike by US Fed rise. Pair's immediate resistance is seen at 1.01 levels and above which gains could be extended to 1.0221 levels. On the other hand, pair is likely to find support at 0.9950 levels and then at 0.9900 levels. EUR/CHF stays on the back foot, off from 1.0694 to 1.0645. A doji on the daily candlesticks suggests uncertainty and consolidation of the recent upward move.
GBP/USD fell to 1.5037 after weaker than expected UK Jan industrial and manufacturing output data IP -0.1%, MP -0.5%. Forecast for both stood at +0.2%. On the upside, next resistance is seen at 1.5100 above which it could extend gains to 1.5136 (March 9 High) levels. On the downside, support is located at 1.5020, and then at 1.4988 levels. EUR/GBP hovered in the area of multi-year lows around 0.7080 on Wednesday, and subsequently fell to a fresh 7-1/2 year low at 0.7020.
