In the next few hours, members of the ECB, the BOE and the Fed will speak. Regardless, the USD/JPY is suggesting that a swing low might be near.
Asian indices:
- Australia’s ASX 200 Index is up 50.2 points (0.67%) and is currently trading at 7,514.50
- Japan’s Nikkei 225 index is up 338.3 points (0.97%) and is currently trading at 35,294.19
- Hong Kong’s Hang Seng Index is up 309.9 points (1.41%) and is currently trading at 22,237.53
- China’s A50 index is up 332.34 points (2.48%) and is currently trading at 13,722.07
UK and Europe:
- UK FTSE 100 futures are currently up 1.5 points (0.02%), the spot market is currently valued at 7538.75
- Euro STOXX 50 futures are currently down -11 points (-0.28%), the spot market is currently valued at 3,991.18
- Germany’s DAX futures are currently down -48 points (-0.32%), the spot market is currently valued at 14,772.33
US futures:
- DJI futures are currently down -53 points (-0.15%).
- S&P 500 futures are currently down -18.75 points (-0.12%).
- Nasdaq 100 futures are currently down -7 points (-0.15%).
Asian markets were higher for most of the night as they tracked moves out of Europe and the US. Japan’s stock markets were lower and the Nikkei 225 fell back to its 200-day EMA after failing to breach trend resistance on the daily chart. Futures markets are slightly lower after the open, which is no surprise given their recent rally.
Commodity Currencies Strongest Majors MTD
The Australian dollar is the top performer, up 3.7% against the dollar, compared to 2.9% for the NZD and 1.5% for the CAD. The Japanese yen was the strongest currency today, gaining around 0.9% against the US dollar and helping the USD/JPY pull back from arguably overblown highs. Most of its gains were seen earlier in the session heading towards the Tokyo Fix, just a day before fiscal year-end for Japan. The yen is also up around 0.5-0.6% against commodity currencies. The US dollar slightly extended yesterday’s losses as peace talks appeared to have lost its appeal as a safe haven. Outside the yen, volatility was limited by a lack of economic news released during the Asian session.
USD/JPY is currently flat for the week
Despite having its most volatile week since the pandemic, USD/JPY is practically flat for the week and on course for a bearish pinbar. However, due to the month and quarter-end moves, there is a good chance of volatility leading into Friday’s close.
It is now within its second day of retracement, although today’s low was halted just before testing 121.0. Dare we say the low for the day might be coming? Price action on the hourly chart appears to be corrective in nature and the market is attempting to form a base around the 200 bar EMA and the monthly pivot point within its bearish channel. Should it recover, upper trendline or 122.50 area could be targeted. A break above 122 could be taken as an early sign of recovery (or at least a reverse bounce in the near term).
Next (times in GMT)
ECB President Christine Lagarde will speak at 08:00 GMT, while policy market Peter Zakimir will be providing a quarterly outlook in a separate session at the same time. BOE’s Christopher Broadbent then speaks at 0810. As for Fed members, Thomas Barkin and Esther George will speak at 1:15 p.m. and 5:00 p.m. respectively.
Preliminary CPI data for Germany is at 12:00. The usual culprits were behind February’s surge, including supply chain shortages and energy, and we don’t expect these forces to simply go away as this month’s report has to factor in the war in Ukraine.
The final readings for GDP, which include the core PCE, will be released at 12:30 GMT. They are unlikely to generate the volatility that the initial report suggests unless we see (through some magic) that core PCE has surprisingly dropped.
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