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Market movers today

German factory orders will reveal if manufacturing activity rebounded in January, after slumping at the end of last year.

Fed chair Powell will present his semi-annual Monetary Policy Report to the Senate Banking Committee. Ahead of the February jobs report on Friday, he will probably try to strike a balance between highlighting progress in slowing inflation without job losses, while also noting that peak rates have not yet been reached while inflation risks remain skewed to the upside.

Sweden's Riksbank Governor Thedéen speaks on the current economic situation.

In Denmark and Norway industrial production for January is on the agenda.

The 60 second overview

Markets: It has been fairly quiet overnight. Chinese equities have been supported by comments from the general manager of the Shanghai Stock Exchange that state-owned enterprises need better access to funding. Otherwise most other equity indices and futures are trading only marginally in green. US yields are slightly lower, EUR/USD remains just south of 1.07 and commodities remain little changed.

Reserve Bank of Australia: This morning RBA hiked the cash rate by 25bp to 3.6% in a decision widely anticipated in markets. Meanwhile, RBA's accompanied message to markets was slightly to the dovish side with Governor Lowe emphasising a heightened focus on incoming data in deciding "when and how much further" rates need to be hiked. Also, Lowe's comments on recent data releases suggested much less concern as to the topside risk to inflation. Markets reacted by pricing in a slightly lower peak in policy rates around 4.0% (from 4.1%) which also weighed on the AUD currency in the magnitude of roughly 0.5%.

Oil prices. Yesterday Brent Crude rose to around the USD86/bbl level and hence continued the trend higher from the last week. In the big picture oil prices remain range bound with little breaking news to break out of the range. Recent good news on the world economy has not caught the attention of the oil market either. We still forecast Brent to trade in the USD80-90/bbl range this year.

Euro Area retail sales: Despite the weakness in December, euro area retail spending still had a muted start to the year. Real retail sales were up 0.3% m/m in January (-2.3% y/y), on the back of stronger food spending, but the downtrend continued for other goods. Despite the ongoing recovery in consumer confidence, it seems private consumption is unlikely to return as a major growth driver in Q1.

Switzerland. Swiss CPI for February surprised sharply to the upside printing 3.4% y/y (consensus: 3.1%, prior: 3.3%). Likewise, core inflation ticked higher at 2.4% y/y up from 2.2% in January. CHF initially rose considerably, but ended up erasing the gains during the afternoon. The higher than expected inflation print further underpins our long-held view that inflation has not come sufficiently down for the Swiss National Bank (SNB) to conclude its hiking cycle or allow a significant depreciation of the Swiss Franc. We continue to expect the SNB to hike 25bp at its next week meeting in March with upside risk to our call.

FI: It was again a dramatic day in the global fixed income markets. It started with a solid decline in bond yields and interest rates, but at the end of the day, the 10Y German government bond yield had risen 10bp and 10Y Treasuries had risen some 5-6bp from the lows on Monday. The only markets where yields were not rising were Sweden and Norway. Furthermore, Denmark only saw a modest rise relative to Germany. The 10Y spread between Norway and Germany is now testing 50bp, while the 2Y spread between Norway and Finland is at 25bp.

FX: Broad EUR appreciation yesterday though EUR/USD remains below 1.07 ahead of Jerome Powell's Congressional testimony at 16:00. Weak Scandies continue. EUR/NOK took another big leap and is now testing year highs at 11.15. EUR/SEK approaching 11.20 resistance area ahead speech by Erik Thedéen at 08:30, a potential market mover.

Credit: Very strong primary activity kicked off the week in the corporate bond market. A wide range of companies announced new issues. In the Nordics most notably Vestas Wind Systems A/S announced intentions to launch a new EUR500m Sustainability-Linked bond while Neste Oyj announced intentions to launch a EUR6y and a EUR10y Green Senior unsecured bond. Overall, the positive market sentiment continued in the secondary market with iTraxx Main 2bp tighter at 74bp while iTraxx X-over tightened 11bp to 385bp.

Nordic macro

In Sweden, we will get the monthly budget balance from the Swedish National Debt Office (SNDO). The SNDO's two week old forecast suggests a surplus of SEK58.7bn for February. This is a seasonal quite normal figure for February, but we also note that electricity support package has started to be paid out since Feb 20 which might generate some uncertainty around this number.

Riksbank governor Erik Thedéen will speak on the topic "The situation in the economy" at 8.30 CET. The speech will not be published but media is invited so look out for news flashes.

Daily Pivots: (S1) 1.0638; (P) 1.0667; (R1) 1.0711; More...

Breach of 1.0690 minor resistance suggests that rebound from 1.0532 is resuming. The development revives the case that correction from 1.1032 has completed at 1.0532 already. Intraday bias is back on the upside for 1.0803 resistance first. On the downside, however, break of 1.0575 support will dampen this bullish view again and turn bias back to the downside.

In the bigger picture, as long as 1.0482 support holds, rise from 0.9534 (2022 low) should continue to 61.8% retracement of 1.2348 (2021 high) to 0.9534 at 1.1273. However, sustained break of 1.0482 will bring deeper fall to 61.8% retracement of 0.9534 to 1.1032 at 1.0106, even as a corrective pull back.

Daily Pivots: (S1) 1.1996; (P) 1.2023; (R1) 1.2052; More...

Range trading continues in GBP/USD and intraday bias remains neutral. On the downside, break of 1.1914 will resume the decline from 1.2446, as the third leg of the corrective pattern from 1.2445, for 1.1840 support and possibly below. On the upside, break of 1.2142 resistance will turn bias back to the upside for further rebound to 1.2269 and above.

In the bigger picture, as long as 1.1840 support holds, rise from 1.0351 medium term bottom (2022 low) should still continue to 61.8% retracement of 1.4248 (2021 high) to 1.0351 at 1.2759. However, decisive break of 1.1840 will complete a double top pattern (1.2445, 1.2446) after rejection by 55 week EMA (now at 1.2243). Deeper decline should be seen back to 38.2% retracement of 1.0351 to 1.2445 at 1.1645.

Daily Pivots: (S1) 0.9286; (P) 0.9330; (R1) 0.9353; More...

Intraday bias remains on the downside for USD/CHF. As noted before, corrective rebound from 0.9058 could have completed ahead of 38.2% retracement of 1.0146 to 0.9058 at 0.9474. Sustained break of 0.9289 resistance turned support will pave the way to retest 0.9058 low. On the upside, above 0.9358 minor resistance will turn intraday bias neutral and bring consolidations first, before another decline.

In the bigger picture, decline from 1.0146 is seen as part of a long term sideway pattern. As long as 38.2% retracement of 1.0146 to 0.9058 at 0.9474 holds, another fall is in favor through 0.9058. However, sustained trading above 0.9474 will indicate that the medium term trend has reversed, and open up further rally to 61.8% retracement at 0.9730 and above.

Daily Pivots: (S1) 135.47; (P) 135.83; (R1) 136.29; More...

USD/JPY is still bounded in range of 135.24/137.09 and intraday bias remains neutral. On the downside, break of 135.24 support will indicate short term topping, after rejection by 38.2% retracement of 151.93 to 127.20 at 136.64. Intraday bias will be turned back to the downside for 55 day EMA (now at 134.05) first. Sustained break of 55 day EMA will indicate that whole rebound from 127.20 has completed. On the upside, however, sustained break of 136.64 will indicate that fall from 151.93 has completed, and bring further rally to 61.8% retracement at 142.48.

In the bigger picture, focus remains on 38.2% retracement of 151.93 to 127.20 at 136.64. Sustained break there will indicate that price actions from 151.93 medium term are merely a corrective pattern. Such development will maintain long term bullishness. Rejection by 136.64 will, on the other hand, extend the fall from 151.93 to 61.8% retracement of 102.58 to 151.93 at 121.43 at a later stage.

Daily Pivots: (S1) 0.6708; (P) 0.6739; (R1) 0.6762; More...

Immediate focus is now on 0.6693 support in AUD/USD. Firm break there will l resume the fall from 0.7156 to 161.8% projection of of 0.6854 to 0.7028 from 0.6854 at 0.6539. Nevertheless, break of 0.6782 resistance should now indicate short term bottoming, and turn bias back to the upside for stronger rebound.

In the bigger picture, focus is staying on 0.6721 structural support. Sustained break there will argue that whole rise from 0.6169 (2022 low) has completed at 0.7156, after rejection by 55 month EMA (now at 0.7164). Deeper decline would then be see back to 61.8% retracement of 0.6169 to 0.7156 at 0.6546, even as a corrective fall. Nevertheless, strong rebound from current level will retain medium term bullishness for another rise through 0.7156 later.

Daily Pivots: (S1) 1.3587; (P) 1.3608; (R1) 1.3634; More....

USD/CAD is staying in consolidation from 1.3664 and intraday bias remains neutral. Further rise is expected as long as 1.3474 resistance turned support holds. As noted before, corrective pattern from 1.3976 should have completed at 1.3261. Break of 1.3664 will resume the rise from 1.3261. Sustained trading above 1.3684 will confirm this bullish case and bring retest of 1.3976.

In the bigger picture, outlook stays bullish with 1.3222 cluster support (38.2% retracement of 1.2005 to 1.3976 at 1.3223) intact. Break of 1.3976 resistance will resume larger up trend from 1.2005 (2021 low) to 61.8% projection of 1.2401 to 1.3976 from 1.3261 at 1.4234.

Daily Pivots: (S1) 0.9922; (P) 0.9945; (R1) 0.9965; More....

Intraday bias in EUR/CHF remains on the downside at this point. Fall from is seen as another falling leg inside the corrective pattern from 1.0095. Deeper decline would be seen back to 0.9844 support. But downside should be contained by 0.9832 to bring rebound. On the upside, above 0.9986 minor resistance will turn bias back to the upside for 1.0040 resistance instead.

In the bigger picture, with 0.9832 support intact, rise from 0.9407 (2022 low) is still expected to continue. Break of 1.0095 and sustained trading above 55 week EMA (now at 1.0021) will be a medium term bullish signal, and bring further rally to 1.0505 cluster resistance (2020 low at 1.0505, 61.8% retracement of 1.1149 to 0.9407 at 1.1484). However, firm break of 0.9832 support will revive medium term bearishness and bring retest of 0.9407 low instead.

Daily Pivots: (S1) 163.04; (P) 163.41; (R1) 163.85; More...

GBP/JPY is staying in consolidation below 165.99 and intraday bias remains neutral. Further rally is still expected as long as 161.18 support holds. As noted before, corrective fall from 172.11 should have completed at 155.33 already. Break of 165.99 will target 169.26 resistance first, and then 172.11 high.

In the bigger picture, corrective decline from 172.11 medium term should have completed at 155.33. With 38.2% retracement of 123.94 (2020 low) to 172.11 (2022 high) at 153.70 intact, medium term bullishness is retained. That is, larger up trend from 123.94 (2020 low) is still in progress. Break of 172.11 high to resume such up trend is expected at a later stage.

Daily Pivots: (S1) 144.42; (P) 144.90; (R1) 145.68; More....

EUR/JPY is staying in consolidation below 145.55 and intraday bias remains neutral. Further rally is expected as long as 142.13 support holds. Corrective fall from 148.38 has completed at 137.37 already. Break of 145.55 will resume the rise from 137.37 to 146.71 resistance and then 148.38 high.

In the bigger picture, as long as 55 week EMA (now at 139.42) holds, larger up trend from 114.42 (2020 low) is still in progress for 149.76 long term resistance. However, firm break of 55 week EMA will bring deeper fall to 38.2% retracement of 114.42 to 148.38 at 135.40. Sustained break there will raise the chance of trend reversal, and target 61.8% retracement at 127.39.