Sample Category Title

The 50– and 100-hour simple moving averages have guided the EUR/JPY currency pair towards the lower boundary of a medium-term descending channel pattern at 123.75.

As for the near future, it is likely that the common European currency will continue its decline against the Japanese Yen. Bearish traders could push the currency exchange rate towards a support cluster at 121.99.

Moreover, technical indicators flash sell signals on both the smaller and the larger time frames chart.

The Australian Dollar depreciated about 63 base points against the US Dollar on Wednesday. The currency pair tested the lower boundary of an ascending channel pattern at 0.7068 during yesterday's trading session.

Bullish traders tried to drive the exchange rate higher during the morning hours of today's trading session. However, a resistance cluster formed by the combination of the 50-, 100– and 200-hour SMAs and the weekly pivot point at 0.7103 restricted such movement.

If the resistance cluster holds within this session, traders should expect a breakout through the lower boundary of an ascending channel pattern.

During Wednesday's trading session, the currency exchange rate sideways to end the day near the monthly S1 at 1.1240, as it was predicted! On Thursday morning, the rate was trading at the 1.1251 mark.

In regards to the near-term future, most likely, the rate will pass through the support levels of the monthly S1 and the weekly S1 to end the trading session at the 1.1200 level. Besides, the 55-hour simple moving average could retrace the rate during the day!

However, today's US Final GDP data release at 12:30 GMT, could depreciate the US Dollar against the European Single Currency to push the rate to the 1.1280 level.

The US Dollar appreciated about 63 base points against the Canadian Dollar on Wednesday. The currency pair was guided up by the 50– and 100-hour simple moving averages during the previous trading session.

The exchange rate bounced off the lower boundary of a junior ascending channel pattern at 1.3405 during the European trading session on Thursday.

Most likely, the currency exchange rate could aim for a resistance line formed by the monthly pivot point at 1.3465 within this session.

Furthermore, technical indicators demonstrate that bulls will continue their dominance in the market today.

During Wednesday's trading session, from 1:00 until 2:00 GMT, the New Zealand Dollar depreciated against the US Dollar by 1.81% It was a 108 pip move on the currency exchange rate.

The reason for the drop was the signal from the Reserve Bank of New Zealand of monetary policy easing, as the Bank decided to keep the rate unchanged.

As for the near future, it is likely that bullish traders will try to regain their lost potion. Meanwhile, the currency pair breached the upper boundary of a flag formation pattern at 0.6811.

During Wednesday's trading session, the currency exchange rate was resisted by the 100-hour simple moving average to end the day at 1.3100. On Thursday morning, the rate was located between the monthly pivot point and the 50.00% Fibonacci retracement level at the 1.3140 mark.

In regards to the near-term future, most likely, the British Pound will trade sideways to stay above the monthly pivot point at the 1.3129 mark. It is expected that the rate will end the day at the 1.3150 level.

On the other hand, today's US Final GDP data release at 12:30 GMT might appreciate the US Dollar against the British Pound to push the rate to pass the resistance of the monthly PP at the 1.3129 mark.

Brexit : MPs in denial

Yesterday evening was a total disaster in the House of Commons. After hours of discussion, MPs passed on all eights Brexit alternatives put to vote. As expected the 'no deal' plan B didn’t receive much love (160 for and 400 against), just as the 'revocation to avoid no deal' (184 versus 293). The 'confirmatory public vote' is the one that was views more favourably but it was still short of 27 votes (268 versus 295). The 'customs union' with the UE was also one of the most popular, but unable to get the majority for approval. The results suggested that the Tories would rather leave without a deal, which also suggests that any replacement for Theresa May should be a harder Brexiter than the current Prime Minister. Theresay hasn’t decided yet whether she’ll put her deal to vote one more time before the end of the week. After two rejections, it would most likely suffer a similar fate, even though she promised to resign should the deal passes.

GBP/USD has been trading in a volatile range since the beginning of the week. Starting I late European session yesterday, the cable fell roughly 1% to 1.3140 and has been grinding slightly higher since then. Looking at non-commercial positioning data from last week, as reported by the CFTC, we notice that speculators were reluctant to play the Brexit game as they mostly stayed out of the market. In the option market, 1-week ATM implied volatility rose slightly to 15.41%, while the 1-week 25-delta risk reversal measure eased slightly to -1%, which suggests that puts have more in demand that call contracts. The situation is also impacting safe haven currency pairs as the prices of put options on USD/JPY have rose compared to call options. Surprisingly, the ones on the Swiss franc have moved in the opposite direction, which may suggest that Switzerland may not be able to avoid the damages from a hard Brexit on the EU economy.

Central banks to the rescue

Many of us are watching markets and Brexit chaos wondering why risk premia is not fully priced. Not only does uncertainty over EU-UK relationship threaten 20% of the global economy but economic data continued to indicated that the global decelerations is lasting longer than expected. In addition, many analysts expected deeper slowdown, due to weakness in manufacturing and trade from where we are today. We believe the divergence between weak economic performances yet resilient equity market is due to central banks pivot from normalization. With German yields back in negative territory and US treasuries curves inverted the FI market is clearly suggested weaker outlook. The Fed shifting dots is a clear signal that major central banks are moving from normalizations back towards reflation. With loose monetary policy conditions the cost of risk taking decreases. We have witness the powerful effect of central bank easing by driving the longest bull run and overlooking idiosyncratic risk events. The direction of inflation suggest that changes the current dovish bias is unlikely. In the coming month China should introduced additional easing measure, European provide modest fiscal easing and geopolitical support from US-China trade agreement provide and encouraging backdrop for equity prices.

Elsewhere, TRY has been on roller coaster ride of stomach turning effect. Markets have reacted to government interventionist measure stopping financial institutions from working deal that would directly lead to liar deprecations. This follows on the heels of suspend the one-week repo auctions. This singular move should be consider a 150bp hike on bank financing. Re remain constructive on USDTRY as the financial chaos will begin to spill over into political disorder.

The Brexit drama continues! What has recently happened has offered little help to clear the mist of the matter. Rather, Britons, as well as global investors, have become more uncertain about the outlook. On Wednesday, the UK parliament has rejected ALL eight Brexit options in the “indicative votes”. Recall that the European parliament has ruled that the UK would leave the EU on May 22 if the Withdrawal Agreement (the deal) is passed by MPs, or on April 12, should there be no deal approved.

All Eight Motions Were Voted Down

What Next - Third Meaningful Vote?

Despite rejection of all motions yesterday, it appears that PM Theresa May still attempts to put the deal for a third meaningful vote, together with the promise she would resign as the prime minister upon approval of the deal. However, whether a third vote can be tabled is still uncertain as House of Commons Speaker John Bercow cast doubt on the move. As he suggested, “there should be no misunderstanding, I wish to make clear that I do expect the government to meet the test of change…They should not seek to circumvent my ruling by means of tabling either a notwithstanding or a paving motion, the tabling office has been instructed no such motion would be accepted”.

Worse still, PM May might not be able get a deal despite the promise to resign. It is true that some Brexiteers have softened in light of the concern that UK might stay in EU indefinitely if the delay drags on. For instance, hardliner Boris Johnson has signaled his inclination to vote for the deal. However, DUP has refused to support the deal as the Irish border issue remains unresolved. In the statement released yesterday, DUP noted that “the necessary changes we seek to the backstop have not been secured”, and “the remaining and ongoing strategic risk that Northern Ireland would be trapped in backstop arrangements at the end of the implementation period” has not yet dissipated. It added that the backstop arrangement “has the potential to create an internal trade border within the UK and would cut us off from our main internal market, being Great Britain”. Ironically, the dust is far from settled in the case that PM May’s deal is passed without DUP’s support. Approval of an unfavorable deal in the eyes of DUP may lead the party to withdraw its support for the Conservative government, which has lost majority after the snap election in 2017. Such scenario might bring about another snap election of the parliament.

Eurozone Economic Sentiment Indicator (ESI) dropped to 105.5 in March, down from 106.2 and missed expectation of 105.9. EU28 ESI dropped -0.4 to 105.0. The deterioration of Eurozone ESI was resulted from "markedly lower confidence in industry". Industrial Confidence dropped to -1.7, down from -0.4 and missed expectation of -0.5. Services Confidence dropped to 11.3, down from 12.1 and missed expectation of 12.0. Consumer Confidence was finalized at -7.2, up from -7.4.

Amongst the largest Eurozone economies, ESI rose markedly in Spain (+2.3), while it decreased sharply in Germany (−1.8) and the Netherlands (−1.3), and remained broadly unchanged in France (+0.2) and Italy (−0.2).

Also released, Eurozone Business Climate Indicator dropped to 0.53, down from 0.69 and missed expectation of 0.69. All the five components of the indicator worsened: while managers' views of the past production, their production expectations, and their assessments of both overall and export order books declined significantly, their appraisal of the stocks of finished products worsened only slightly.

Notes/Observations

• European Mar inflation data (German States and Spain) coming in below expectations and moving farther away from ECB target
• Brexit Stalemate deepens as UK Parliament failed to agree on a way forward via 8 options
• UK PM May announced to backbench Conservative MPs that she would step down as PM after her Brexit deal was delivered and would not lead the next stage of negotiations
• Turkey's deepening market turmoil fuels concern about contagion to other developing market

Asia:

• China Premier Li keynote speech at Boao Forum (aka Asian Davos) stated that it had not adopted loose monetary policy to stimulate growth but policies were paying off. Economic indicators were steady in first 2 months of the year with market expectations improving. Could not rule out some fluctuation in quarterly economic growth this year, enough policy tools to deal with any slowdowns

Europe:

• UK Parliament indicative votes showed that no majority was reached on any indicative votes (as expected); MP Letwin proposed parliament should vote again on Monday (Apr 2nd) to reconsider the matters
• Parliament approved legislation to delay date of Brexit (as expected) in a 441 to 105 vote. To delay Brexit until May 22nd if Brexit deal was approved by Parliament before March 29th, or April 12th if no deal was approved
• Brexit Min Barclay stated that the process strengthened our view that PM May's deal was the best option
• PM May said to have told Tory MPs in her Statement to 1922 Tory party committee that she'll hand over leadership once Brexit was delivered but did not offer a specific timetable for stepping down
• Tory Lawmaker Rees-Moog: If PM May brought her Brexit deal to 3rd meaningful vote, then would support Northern Irish DUP party view. Did not expect vote on PM's deal, if no DUP party support was secured.

Americas:

• Trump Administration Official: US and China had made progress in all areas of trade talks. China had made proposals on trade, including technology transfers, that are more specific and with wider scope than ever before. Reiterated that enforcement and intellectual property remained sticking points. Had no specific time frame set for trade deal, talks could conclude anytime from April to June
• US President Trump: We're going to make 'very good' deal with China

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Equities

• Indices [Stoxx600 +0.37% at 378.68, FTSE +0.74% at 7,247.25, DAX +0.54% at 7,247.25, CAC-40 +0.44% at 5,324.55, IBEX-35 +0.04% at 9,234.04, FTSE MIB -0.02% at 21,190.50, SMI +0.61% at 9,447.50, S&P 500 Futures +0.08%]
• Market Focal Points/Key Themes: European Indices trades higher across the board, trading towards session highs, tracking higher US futures and mixed Asian Indices. On a busy morning for corporate earnings shares of SLM Solutions trades higher after earnings and the naming of a new CEO, with S&T, Evotec, Volex and Manz among other names gaining on earnings, while SMA Solar, Mitie Group and Drillisch are some of the notable names declining on earnings. In other news SwedBank announced the dismissal of its CEO amid the money laundering investigation; Hochtief declines almost 8% after Atlantia entered into a funded collar transaction for over 5.6M shares, while tobacco names British American Tobacco and Imperial brands rise on analyst upgrades. Looking ahead notable earnings include Accenture, Qiwi and Trans World Entertainment.

Equities

• Consumer discretionary: Dignity [DTY.UK] -3% (CMA decision), Asos [ASC.UK] +2.0% (analyst action), Volex [VLX.UK] -8% (trading update), Mitie Group [MTO.UK] -8% (trading update)
• Financials: Swedbank [SWEDA.SE] -4% (CEO steps down)
• Healthcare: Bayer [BAYN.DE] -1.5% (statement on Jury's decision), Evotec [EVT.DE] +4% (earnings)
• Industrials: Manz Automation [M5Z.DE] +3% (earnings)
• Technology: United Internet [UTDI.DE] -4% (earnings), Meyer Burger Technology [MBTN.CH] -4% (placement), SMA Solar Technology [S92.DE] -12% (earnings; guidance)
• Utilities: SSE [SSE.UK] +0.5% (trading update)

Speakers

• ECB's Praet (Belgium, Chief Economist) confirmed that ECB was looking at tiered deposit rates but would need a monetary policy case. Could decide on TLTRO pricing at June meeting with terms to depend on lending conditions
• Northern Irish DUP Leader Foster: Decline to rule out supporting a softer Brexit. She noted that abstention was never an option as would be the worst of all worlds
• Turkey Central Bank Gov Cetinkaya: To continue to decisively strengthen the reserves. Noted that net reserves rose by $2.4B during the past week
• German BGA exporters association forecasted 2019 exports at 3.0% if no escalation of Brexit chaos and the U.S.-China trade row
• China Commerce Ministry (MOFCOM) spokesperson Gao Feng: Both sides had achieved some progress during recent phone calls but more work was needed to be done. Liu He, USTR Lighthizer and Mnuchin to hold a full day of talks on Fri, Mar 28th; Trade negotiators to hold a working dinner
• China Premier Li stated that he hoped that trade talks produce an outcome as the process was in constant consultations. Both sides should implement it once a deal was reached. Trying to avoid a trade war with US
• Russian troops said to have arrived in Venezuela to discuss military cooperation but not there to carry out any military operation

Currencies/Fixed Income

• European inflation data coming in below expectations and supporting the recent central bank trend that have tilted from normalization bias back towards reflation. The data complementing the recent caution remarks by ECB chief Draghi of risks being tilted to the downside for the region. EUR/USD steady around 1.1250 area.
• GBP/USD was steady in the mid-1.31 area as the Brexit stalemate deepened after UK Parliament failed to agree on a way forward via its 8 options. PM had yet to decide whether to press ahead with a third meaningful vote as the Commons speaker Bercow continued to oppose another vote
• The TRY currency (Lira) continued to be quite volatile. On Wed, the Turkish market saw the overnight implied yield continued to blow out, rising to as high as 1,350% before ending the day at 750%. The market turmoil comes before local elections on Sunday. The TRY has been quite volatile throughout the wee ever since speculation surfaced that the currency might have been propped

Economic Data

• (NL) Netherlands Mar Producer Confidence Index: 6.1 v 6.3 prior
• (FI) Finland Feb House Price Index M/M: +2.0% v -1.3% prior; Y/Y: 1.4% v 0.2% prior
• (NO) Norway Feb Credit Indicator Growth Y/Y: 5.7% v 5.6%e
• (TR) Turkey Mar Economic Confidence: 81.9 v 79.4 prior
• (DE) Germany Mar CPI Saxony M/M: 0.5% v 0.3% prior; Y/Y: 1.4% v 1.4% prior
• (ES) Spain Mar Preliminary CPI M/M: 0.4% v 0.6%e; Y/Y: 1.3% v 1.4%e
• (ES) Spain Mar Preliminary CPI EU Harmonized M/M: 1.4% v 1.6%e; Y/Y: 1.3% v 1.5%e
• (HU) Hungary Feb Unemployment Rate: 3.6% v 3.7%e
• (SE) Sweden Feb Retail Sales M/M: 0.2% v 0.3%e; Y/Y: 3.0% v 2.8%e
• (DE) Germany Mar CPI Brandenburg M/M: 0.4% v 0.6% prior; Y/Y: 1.4% v 1.6% prior
• (DE) Germany Mar CPI Hesse M/M: 0.5% v 0.5% prior; Y/Y: 1.1% v 1.1% prior
• (DE) Germany Mar CPI Bavaria M/M: 0.5% v 0.5% prior; Y/Y: 1.5% v 1.7% prior
• (EU) Euro Zone Feb M3 Money Supply Y/Y: 4.3% v 3.9%e
• (DE) Germany Mar CPI North Rhine Westphalia M/M: 0.4% v 0.5% prior; Y/Y: 1.5% v 1.6% prior
• (PT) Portugal Mar Consumer Confidence Index: -9.5 v -8.3 prior; Economic Climate Indicator: 2.3 v 2.2 prior
• (ZA) South Africa Feb PPI M/M: 0.3% v 0.2%e; Y/Y: 4.7% v 4.5%e

Fixed Income Issuance

• (DK) Denmark sold total DKK3.86B in 3-month and 6-month Bills

Looking Ahead

• (DE) Germany Mar CPI Baden Wuerttemberg M/M: No est v 0.5% prior; Y/Y: No est v 1.7% prior
• (BE) Belgium Mar CPI M/M: No est v 0.3% prior; Y/Y: No est v 2.2% prior
• (BZ) Brazil Feb Central Govt Budget Balance (BRL): -16.5Be v 30.2B prior
• (EG) Egypt Central Bank Interest Rate Decision: Lending Rate currently stands at 16.75%; Deposit Rate: expected to be cut by 50bps to 15.25%-
• (CO) Colombia Feb Industrial Confidence: No est v 6.3 prior; Retail Confidence: No est v 29.3 prior
• (PT) Portugal Central Bank March Economic Bulletin
• 06:00 (EU) Euro Zone Mar Business Climate Indicator: 0.68e v 0.69 prior; Consumer Confidence: -7.2e v -7.2 advance; Economic Confidence: 105.9e v 106.1 prior; Industrial Confidence: -0.6e v -0.4 prior; Services Confidence: 12.0e v 12.1 prior
• 06:00 (CA) Canada Mar CFIB Business Barometer: No est v 59 prior
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €5.5-6.25B in 5-year and 10-year BTP bonds
• 06:00 (IT) Italy Debt Agency (Tesoro) to sell €0.5-1.0B indicated range in Jan 2025 CCTeu (Floating rate Note)
• 06:30 (HU) Hungary Debt Agency (AKK) to sell bonds (3 tranches)
• 07:00 (IE) Ireland Feb Retail Sales Volume M/M: No est v -1.2% prior; Y/Y: No est v 1.2% prior
• 07:00 (BR) Brazil Mar FGV Inflation IGPM M/M: 1.2%e v 0.9% prior; Y/Y: 8.3%e v 7.6% prior
• 07:15 (US) Fed's Quarles speaks at ECB Conference in Frankfurt
• 07:30 (IS) Iceland to sell Bills
• 07:45 (US) Daily Libor Fixing
• 08:00 (CZ) Czech Central Bank (CNB) Interest Rate Decision: Expected to leave 2-Week Repurchase Rate unchanged at 1.75%
• 08:00 (NL) ECB's Knot (Netherlands) in Amsterdam
• 08:30 (US) Q4 Final GDP Annualized (3rd reading) Q/Q: 2.3%e v 2.6% prelim; Personal Consumption: 2.6%e v 2.8% prelim
• 08:30 (US) Q4 Final GDP Price Index: 1.8%e v 1.8% prelim; Core PCE Q/Q: 1.7%e v 1.7% prelim
• 08:30 (US) Initial Jobless Claims: 220Ke v 221K prior; Continuing Claims: 1.78Me v 1.750M prior
• 08:30 (US) Weekly USDA Net Export Sales
• 09:00 (DE) Germany Mar Preliminary CPI M/M: 0.6%e v 0.4% prior; Y/Y: 1.5%e v 1.5% prior
• 09:00 (DE) Germany Mar Preliminary CPI EU Harmonized M/M: 0.6%e v 0.5% prior; Y/Y: 1.6%e v 1.7% prior
• 09:00 (ZA) South Africa Central Bank (SARB) Interest Rate Decision: Expected to leave Interest Rates unchanged at 6.75%
• 09:00 (ZA) South Africa BER Inflation Expectation Survey
• 09:00 (RU) Russia Gold and Forex Reserve w/e Mar 22nd: No est v $482.5B prior
• 09:00 (UK) Baltic Bulk Index
• 09:30 (US) Fed's Clarida at Bank of France Conference in Paris
• 10:00 (US) Feb Pending Home Sales M/M: 0.5%e v 4.6% prior; Y/Y: -3.0%e v -3.2% prior
• 10:00 (BR) Brazil Central Bank (BCB) Quarterly Inflation Report (QIR)
• 10:00 (US) Fed's Bowman (voter) discusses Agriculture and Community Banking
• 10:30 (US) Weekly EIA Natural Gas Inventories
• 11:00 (US) Mar Kansas City Fed Manufacturing Activity Index: 0e v 1 prior
• 11:30 (US) Treasury to sell 4-Week and 8-Week Bills
• 11:45 (SE) Sweden Central Bank (Riksbank) Dep Gov Skingsley in Paris
• 11:45 (IE) Ireland Central Bank Dep Gov Donnery in Paris
• 13:00 (CH) SNB's Maechler in Zurich
• 13:00 (US) Treasury to sell $32B in 7-Year Notes
• 13:15 (US) Fed's Williams (moderate, voter) in Puerto Rico
• 15:00 (MX) Mexico Central Bank (Banxico) Interest Rate Decision: Expected to leave Overnight Rate unchanged at 8.25%
• 15:00 (AR) Argentina Jan Economic Activity Index (Monthly GDP) M/M: No est v 0.7% prior; Y/Y: -6.0%e v -7.0% prior
• 15:00 (US) Feb Agricultural Prices Paid: No est v 1.0% prior; Prices Received: No est v -0.7% prior
• 17:20 (US) Fed's Bullard (dove, voter) in Madison, Wisconsin