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New Zealand ANZ business confidence dropped to 0, gains will be harder won

    By
    ActionForex.com
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    In the preliminary reading, New Zealand ANZ business confidence dropped from 7 to 0 in March. Own activity outlook also dropped from 21.3 to 17.4. Looking at some more details, export intensions rose form 5.1 to 6.0. Investment intentions dropped slightly from 15.6 to 14.4. Employment intentions jumped from 10.6 to 16.0. Pricing intentions rose from 46.2 to 48.9. Inflation expectations rose from 1.76 to 1.95.

    ANZ said: “The economy is entering a phase in which gains will be harder won. The tourism sector pain is becoming more palpable, and booming sectors such as construction are running up against constraints in terms of the availability of labour and, increasingly, imported materials.”

    Full release here.

    AUD/CAD is medium term correction after breaching 0.9173 support

      By
      ActionForex.com
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      AUD/CAD’s breach of 0.9713 support argues that a medium term top is formed at 0.9988, on bearish divergence condition in daily and weekly MACD. A pull back is no abnormal give that the cross has just hit decade long trend line from 1.0784 (2012 high).

      Deeper decline would be seen as the correction from 0.9988 extends, probably to 55 week EMA (now at 0.9502) and below. But, from a medium term point of view, strong support should be seen from 0.9247 cluster (38.2% retracement of 0.8058 to 0.9988 at 0.9251), to bring up trend resumption. But from a near term point of view, risk will now be on the downside as long as 0.9988 holds, in case of recovery.

      BoE Bailey: Feb forward guidance recognizes the sale of shock, uncertainty and risks around recovery

        By
        ActionForex.com
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        BoE Governor Andrew Bailey said in a speech that the February forward guidance is “a recognition of the scale of the shock, the high level of uncertainty and the risks around the Covid recovery, which are still on balance distributed on the downside, though less so as time goes by”. It also set out that there is a “burden of proof” policymakers will need on the “sustainability of the recovery”.

        He also reiterated that while BoE asked banks to make preparations for negative interest rates within the next six months, it “should not be interpreted as a signal about the future path of monetary policy”. “This implies nothing about our intentions in that direction, and nor does it imply that negative rates are our chosen marginal policy tool”, he added.

        BoE’s February forward guidance: “If the outlook for inflation weakens the Committee stands ready to take whatever additional action is necessary to achieve its remit. The Committee does not intend to tighten monetary policy at least until there is clear evidence that significant progress is being made in eliminating spare capacity and achieving the 2% inflation target sustainably”.

        Full speech here.

        Eurozone Sentix rose to 5 in Mar, investors betting on faster opening of economy

          By
          ActionForex.com
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          Eurozone Sentix Investor Confidence jumped to 5 in March, up from -0.2, above expectation of 1. That’s also the highest reading since February 2020. Current Situation index rose from -27.5 to -19.3, highest since March 20202. Expectations index also improved from 31.5 to 32.5, but fell short of January’s high at 33.5.

          Sentix said: “On a positive note, the pandemic seems to have peaked at the global level and vaccination is also progressing well in that the number of immunised individuals is increasing and statistics suggest that effective vaccination protection is being achieved. These trends allow for a faster opening of the economy. This is what investors are betting on.”

          Global overall index rose for the 11th straight month, from 17.5, to 20.5, highest since March 2018. Current Situation rose from 0.0 to 5.5, 10th increase in a row and highest since February 2020. Expectations index was unchanged at all time high at 36.5.

          Full release here.

          Amamiya: Appropriate to ensure BoJ can cut interest rates further

            By
            ActionForex.com
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            BoJ Deputy Governor Masayoshi Amamiya said in a speech, “with the economy hit by the impact of COVID-19, what is important now is to maintain the stability in the bond market and stabilize the entire yield curve at a low level.”

            “in conducting yield curve control in a sustainable manner, it is important to strike an appropriate balance between maintaining market functioning and controlling interest rates”, he added. BoJ can “find more ways to achieve this balance… although significant fluctuations in interest rates could lead to undesirable consequences, fluctuations within a certain range could have positive effects on the functioning of JGB markets without losing the effects of monetary easing.”

            He admitted that because of the possible negative impact, one view in the market is that the Bank finds it difficult to further cut short- and long-term interest rates.” But he emphasized ” it is appropriate to ensure that the Bank can cut them with consideration for the impact on the functioning of financial intermediation.”

            “Sharing this recognition with market participants and various economic entities will further enhance the effectiveness of a cut in short- and long-term interest rates as an option for additional easing.”

            Full speech here.

            WTI gaps up after Saudi facilities attacked, targets 71.29

              By
              ActionForex.com
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              Oil price rises today, in response to news of attack on Saudi Arabia’s facilities over the weekend. Energy Ministry confirmed that its largest export terminal at Ras Tanura in the Persian Gulf received drone attack on March 17, allegedly launched by Iranian backed Houthi rebels from Yeomen.

              “Such acts of sabotage not only target the Kingdom of Saudi Arabia but also the security and stability of energy supplies to the world, and therefore, the global economy,” the ministry said.

              WTI gaps up and hit as high as 67.83. Current up trend is still in acceleration mode. Next term target is 100% projection of 51.58 to 63.70 from 59.17 at 71.29. In any case, near term outlook will stay bullish as long as 59.17 support holds. Also, in the picture, with 65.43 resistance cleared, WTI is looking at 76.75 next.

              China exports and imports jumped in Jan-Feb period, Hong Kong HSI not impressed

                By
                ActionForex.com
                -

                Released during the weekend, China’s exports, in USD term, surged 60.6% yoy in the period of Jan-Feb, well above expectations of 38.9% yoy. Imports also rose 22.2% yoy, above expectation of 15.0% yoy. Trade surplus came in at USD 103.3B, much wider than expected USD 60.0B.

                The impressive data could be distorted by usual volatility for the January to February period. Additionally, the strong growth partly reflected the low base set in 2020. Nevertheless, some analysts still noted the strong rebound in both global and domestic demand.

                Stock traders were not too impressed with the data though. Hong Kong HSI quickly reversed initial gains and it’s currently down -1.6%, or -470 pts, at the time of writing. Immediate focus is now on last week’s low at 28513.13. Break there will extend the correction from 31183.35.

                Still, key support lies in 38.2% retracement of 21139.26 to 31183.35 at 27346.50. As long as it holds, the up trend from 21139.26 is still in favor to resume at a later stage.

                US non-farm payrolls grew 379k in Feb, unemployment rate dropped to 6.2%

                  By
                  ActionForex.com
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                  US non-farm payrolls employment grew 379k in February, well above expectation of 148k. Prior month’s figure was also revised sharply up from 49k to 166k. Overall, total non-farm payroll employment was still down by -9.5m or -6.2% from pre pandemic level in February 2020.

                  Unemployment rate dropped to 6.2%, down from 6.3%, better than expectation of 6.4%. average hourly earnings rose 0.2% mom, matched expectations. Labor force participation rate remained at 61.4%.

                  Full release here.

                  Gold breaks 1700, pressing channel support

                    By
                    ActionForex.com
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                    Gold’s correction extends lower today and breaks 1700 handle. It’s now pressing medium term channel support and there is prospect of a quick rebound. Yet, break of 1740.32 resistance is needed to indicate short term bottoming first. Otherwise, further decline is still in favor.

                    Meanwhile, sustained trading below the channel support will indicates downside acceleration. Gold should then dive further to 50% retracement of 1160.17 to 2075.18 at 1617.67 or even 61.8% retracement at 1509.70, before forming a bottom.

                     

                    Australia AiG services rose to 55.8, but employment fell

                      By
                      ActionForex.com
                      -

                      Australia AiG Performance of Services rose 1.5 pts to 55.8 in February, highest since June 2018, as “recovery following the COVID-19 recession of 2020 gaining in strength”. Looking at some details, sales rose 5.5 pts to 65.7. New orders rose 3.6 pts to 58.4. However, employment dropped -13.2 to 42.7. Input prices rose slightly by 1.8 to 64.4. But selling prices jumped 11.2 to 56.2.

                      Ai Group Chief Executive, Innes Willox, said: ” While the continued improvement in conditions is heartening, employment fell in February following a strong recovery in the preceding months. Employers and employees will be hoping that the further growth in new orders recorded in February signals the continued recovery of sales and employment over the next few months.”

                      Full release here.

                      BoJ Kuroda: Important to keep yield curve stably low

                        By
                        ActionForex.com
                        -

                        BoJ Governor Haruhiko Kuroda told the parliament today that “it’s important to keep the yield curve stably low for the time being.” The central bank allows 10-year JGB yield to move inside a band around 0% to “enhance bond market functions”. But given recent surge in yields, “much more debate” was needed before deciding to widen the band.

                        “It’s a difficult decision,” Kuroda said, “the economy remains under pressure from the COVID-19 pandemic.”

                        “We have been and must continue to buy ETFs flexibly,” he said. “We’ll discuss at the March review how specifically we could make our purchases more nimble”.

                        WTI oil resumes up trend as OPEC+ rolls over production cuts

                          By
                          ActionForex.com
                          -

                          OPEC+ agreed to largely roll over production cuts to the month of April, as announced yesterday. Russia and Kazakhstan were granted exemptions to increase their output by a small amount of 130k and 20k respectively.

                          At a press conference, Saudi energy minister Abdulaziz Bin Salman said the “jury is still out” on the future of the oil market. “When you have this unpredictability and uncertainty, I think there are choices you could make. I belong to the school of being conservative and taking things in a more precautionary way.

                          WTI crude oil resumed recent up trend by breaking through 63.70 resistance to as high as 64.71 so far. Next is key structural resistance at 65.43. We’d look for topping signal around this key resistance level. Break of 59.17 support would finally bring a long-overdue correction. Yet, firm break of 65.43 would extend the upstoppable up trend to next key resistance at 76.75 (2018 high).

                          NASDAQ completed HnS top, to lend strong support from 12074

                            By
                            ActionForex.com
                            -

                            NASDAQ closed down -2.11% or 274 pts to 12723.47 overnight. The strong break of 12983.05 neckline support confirmed the completion of head and should top reversal pattern as mentioned (ls: 13728.98, h: 14175.11, rs: 13601.33)  here. More downside is expected for now, for minimum target at 100% projection of 14175.11 to 13003.98 from 13601.33 at 12430.20 and below.

                            Still, we’d maintain that cluster support at 12074.06 (61.8% retracement of 10822.57 to 14175.11 at 12103.24) is the key level. We’d expect strong support from there to contain down side and bring rebound (at least on first attempt). That could keep the pattern from 14174.11 as a correction to rise from 10822.57 only, and set the base for up trend resumption later.

                            However, sustained break of 12074.06 will argue that NASDAQ is already correcting the whole up trend from 6631.42. That would open up the case of deeper medium term correction through 10822.57 support.

                            Similarly, even though S&P 500 looks vulnerable for a deeper pull back, we’d expect strong support from 3588.11 to contain downside to bring rebound. But sustained break there would indicate the start of a deeper correction to the whole up trend from 2191.86.

                            US 10 year yield jumped as Fed Powell left no hint on operation twist

                              By
                              ActionForex.com
                              -

                              US treasury yields surged again while stocks tumbled overnight after Fed Chair Jerome Powell failed to provide any guidance on what Fed would do regarding recent sharp rise in long-term yields. That left markets wondering how far Fed would allow the yield curve to continue to steepen.

                              Powell noted that the climb in yield was “something that was notable and caught my attention”. He would be “concerned by disorderly conditions in markets or a persistent tightening in financial conditions that threatens the achievement of our goals”. Yet, Fed is looking at “a broad range of financial conditions,” rather than a single measure.

                              There were some speculations that Powell would hint on the possibility of an “Operation Twist” that concentrate on purchases on the longer-end. When asked about the topic, Powell just said “our current policy stance is appropriate”.

                              US 10-year yield rose 0.0080 to 1.550 overnight, but it’s held below last week’s high of 1.614 so far. Upside momentum in TNX remain rather firm from medium term point of view. Any “disorderly” movement could shoot TNX to 2% level rather quickly, which is close to 1.971 structural resistance and 61.8% retracement of 3.248 to 0.398 at 2.159.

                              US initial jobless claims rose to 745k, slightly below expectations

                                By
                                ActionForex.com
                                -

                                US initial jobless claims rose 9k to 745k in the week ending February 27, slightly below expectation of 755k. Four-week moving average of initial claims dropped -16.75k to 790.75k.

                                Continuing claims dropped -124k to 4295k in the week ending February 20. Four-week moving average of continuing claims dropped -99k to 4448k.

                                Full release here.

                                EUR/CHF upside breakout, a look at GBP/CHF and CHF/JPY too

                                  By
                                  ActionForex.com
                                  -

                                  EUR/CHF’s rise from 1.0503 resumes by breaking through 1.1096 resistance, and hits as high as 1.1118 so far. Further rally should now be seen to 100% projection of 1.0503 to 1.0915 from 1.0737 at 1.1149. Sustained break there will indicate upside acceleration and carries larger bullish implications. Next target will be 161.8% projection at 1.1404.

                                  Now, a focus will be on GBP/CHF to gauge the general selling pressure on Swiss Franc. Break of 1.2893 will resume the larger rise from 1.1102, Next target will be 1.3310 resistance, and probably further to 161.8% projection of 1.1102 to 1.2259 from 1.1683 at 1.3555.

                                  CHF/JPY is another cross to look at. Firm break of 116.20 support will argue that whole rise from 106.71has completed at 118.84. Deeper fall would be seen back to 113.73 support first.

                                  Eurozone unemployment rate unchanged at 8.1% in Jan, EU at 7.4%

                                    By
                                    ActionForex.com
                                    -

                                    Eurozone unemployment rate was unchanged at 8.1% in January, better than expectation of 8.3%. 13.282 million people in the Eurozone were unemployed, up 8000 from December.

                                    EU unemployment rate was also unchanged at 7.4%. 15.663 million people were unemployed, up 29000 from December.

                                    Full release here.

                                    Eurozone retail sales dropped -5.9% mom in Jan, EU down -5.1% mom

                                      By
                                      ActionForex.com
                                      -

                                      Eurozone retail sales dropped sharply by -5.9% mom in January, worse than expectation of -1.1% mom. Volume of retail trade decreased by -12.0% mom for non-food products and by -1.1% mom for automotive fuels, while it increased by 1.1% mom for food, drinks and tobacco.

                                      EU retail sales dropped -5.1% mom. Among Member States for which data are available, the largest decreases in total retail trade were registered in Austria (-16.6% mom), Ireland (-15.7% mom) and Slovakia (-11.1% mom). The highest increases were observed in Sweden (+3.5% mom), Bulgaria (+1.8% mom) and Estonia (+1.7% mom).

                                      Full release here.

                                      UK PMI construction rose to 53.3, fastest rise in cost burdens for 12 yrs

                                        By
                                        ActionForex.com
                                        -

                                        UK PMI Construction rose to 53.3 in February, up from 49.2, above expectation of 51.5. Markit said the recovery in total output restarted during the month. Increase in commercial activity helped offset housing slowdown. However, there was fastest rise in cost burdens for more than 12 years.

                                        Tim Moore, Economics Director at IHS Markit: “Construction work regained its position as the fastest growing major category of UK private sector output in February. The rebound was supported by the largest rise in commercial development activity since last September as the successful vaccine rollout spurred contract awards on projects that had been delayed at an earlier stage of the pandemic….

                                        “Stretched supply chains and sharply rising transport costs were the main areas of concern for construction companies in February. Reports of delivery delays remain more widespread than at any time in the 20 years prior to the pandemic, reflecting a mixture of strong global demand for raw materials and shortages of international shipping availability. Subsequently, an imbalance of demand and supply contributed to the fastest increase in purchasing costs across the construction sector since August 2008.”

                                        Full release here.

                                        NASDAQ completing head and should top reversal pattern

                                          By
                                          ActionForex.com
                                          -

                                          NASDAQ closed down -2.7% or -361 pts to 12997.75 overnight, losing 13k handle. More importantly, it’s now pressing 12985.05 support. Decisive break there will confirm a head and shoulder top formation (ls: 13728.98, h: 14175.11, rs: 13601.33). That would confirm near term reversal and target 100% projection of 14175.11 to 13003.98 from 13601.33 at 12430.20 and below.

                                          Nevertheless, the medium term up trend is not too under threat yet. We’re looking at cluster support at 12074.06 (61.8% retracement of 10822.57 to 14175.11 at 12103.24) to contain downside and bring rebound. That would set the base for another up leg in the current up trend from 6631.42. However, firm break of 12074/12103 will open up the case of deeper medium term correction.

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