Forex Trading Library

Forex Afternoon Wrap 26th March

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Key Notes:

  • Gfk German consumer climate 10 vs. 9.8
  • Eurozone M3 money supply y/y 4% vs. 4.3%
  • Eurozone private loans y/y -0.1% vs. 0.1%
  • UK retail sales m/m 0.7% vs. 0.4%; retail sales 5.7% vs. 4.7%
  • UK CBI reported sales 18 vs. 18
  • Weekly jobless claims 282k vs. 290k

Later

  • BoC Governor Stephen Poloz speech
  • US PMI services

The markets saw a high impact day early into the trading session which set a risk aversion mood as Saudi Arabia announced that it launched air strikes in Yemen, supported by the US. The news saw the Yen gather momentum as a safe haven, gaining across the board early in Asian trading session. The Greenback which is also considered a safe haven did not see much reaction however.

The Asian session also saw comments from Bank of Japan’s Harada, who noted that the BoJ could ease further if consumer price inflation does not rise and that it was required to strengthen the deflationary mindset of the people. His remarks were shrugged off by the markets, clearly overshadowed by the risk off mode.

The Australian and Kiwi Dollars however managed to stay in the green, rising from session lows, while USDJPY took a hit early into the day as the currency fell to 118.4 levels.

The European session saw the German Gfk consumer climate rise 10, above forecasts and up from the previous month of 9.7. The Eurozone, M3 money supply managed to rise 4%, failing to meet estimates but rose from 3.7% previously. Private loans declined -0.1%.

The UK retail sales was the major focus in the European trading session as retail numbers for February beat estimates rising 0.7%. The numbers for the previous month was also revised higher from -0.3% to 0.1%. The British Sterling saw a bullish momentum build up, but the Cable failed to break the resistance at 1.495, making it the fifth failed attempt at the breakout since March 18th. GBPUSD continues to range within 1.495 and 1.482.

The Euro managed to gain early on but is showing signs of easing from previous highs of 1.10284, last seen during FOMC meeting. This makes for a third failed attempt at a breakout from this level, as the next technical support comes in at 1.089.

WTI Crude and Brent, both managed to rally since last night, despite Wednesday’s Crude oil inventories showing an increase in inventory levels. At the time of writing, WTI Crude Oil was 2.28%, trading near $51.31, while Brent Oil was up 4%, trading at $58.61. Gold futures also rallied, briefly touching $1220 before easing from the highs ahead of the US economic data release.

Atlanta Fed Dennis Lockhart gave a speech today and the main comments were:

  • Rising US Dollar could have some dampening effect
  • Fed is coming to a point of a seriously considering a rate hike
  • Any meeting from June will be live for a rate hike from the Fed
  • Expects rate hike around mid-year or a little later
  • Expects softer inflation prints in the near term before rising

Weekly US jobless claims managed to improve, falling 9k to 282k while expectations called for the jobless claims to remain unchanged. The US dollar reacted little to the news but is showing signs of trimming its losses incurred earlier in the day. US services PMI is on tap next followed by a speech from BoC Governor, Stephen Poloz which could bring some volatility to the Canadian Dollar.

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