Sample Category Title

Daily Pivots: (S1) 1.1192; (P) 1.1246; (R1) 1.1280; More...

Intraday bias in EUR/CHF remains on the downside for 1.1173 low, which is inside 1.1154/98 key support zone. We'd look for strong support from there to bring rebound. But decisive break will carry larger bearish implication. On the upside, above 1.1298 minor resistance will turn bias back to the upside for rebound.

In the bigger picture, with last week's sharp decline, price actions from 1.1173 are now looking more like a consolidation that's completed at 1.1444. Bearishness is also reflected in multiple rejection by 55 week EMA. Immediate focus is back on 1.1154/98 support zone (2016 high and 61.8% retracement of 1.0629 to 1.2004 at 1.1154). Decisive break there will confirm resumption of whole down trend from 1.2004 and long term bearish reversal. 1.0629 support will be next target.

The EUR/USD could be a 3 wave correction within the wave B (purple) of the larger zigzag. A break above the 100% Fibonacci of wave B vs A invalidates the bearish ABC (purple) zigzag.

The EUR/USD made a bearish bounce at the resistance trend line (red) which completed the wave 4 (blue) correction before breaking below the uptrend channel. The Fibonacci retracement levels of wave B vs A (purple) are expected to act as resistance points for a bearish bounce and further downside.

General Trend:

• Lower government bond yields weigh on Asian financial shares
• Chinese Energy and Financial companies lead declines
• Brokers and big banks decline in Japan, Softbank drops over 4%
• Regional bank Aozora declines over 6% in Japan after profit warning
• Thai Baht (THB) rises after recent elections
• Fed's Evans: Don't expect rate increase until H2 2020
• US politicians react to release of Mueller report on Trump probe
• US/China due to hold trade talks in China on March 28-29th.

Headlines/Economic Data

Australia/New Zealand

• ASX 200 opened -0.9%
• (NZ) New Zealand Shadow Board: Continues to recommend no change to RBNZ rates
• WBC.AU Guides H1 negative impairment on cash earnings of A$260M due to provisions from customer remediation programs
• (AU) Australia MoF sells A$500M v A$500M indicated in 2.75% 2024 bonds; avg yield 1.4465%; bid to cover 5.6x

Japan

• Nikkei 225 opened -1.7%
• 8304.JP Cuts FY18/19 Net profit forecast to ¥36.0B v ¥43.0B prior; cites lower transaction revenues and poor trading results; Announces capital increase for GMO Aozora Net Bank (subsidiary)
• (JP) Bank of Japan (BOJ) Gov Kuroda: During a future policy exit, BOJ earnings will decline but yields should also rise, raising BOJ bond earnings; BOJ has been preparing savings to prepare for JGB fall
• (JP) Former BOJ Official Nakaso: Policies likely to remain accommodative for longer; Renewed accommodation is good for the short term but could be negative in long-term due to more risk
• (JP) According to Nikkei poll, BOJ Tankan business conditions index for large manufacturers is expected to fall 5 points in March
• (JP) Japan Jan All Industry Activity Index M/M -0.2% v -0.4%e

Korea

• Kospi opened -1.3%
• (KR) Bank of Korea (BOK): Domestic consumption has kept expanding but exports growth has declined since December last year due to falling semiconductor prices amid prolonged correction in investment - BOK report
• (KR) Pres Trump withdraws additional sanctions on North Korea – press
• (KR) South Korea FY18 short term time deposits at South Korea banks +17% y/y - Yonhap
• (KR) Bank of Korea (BOK) sells KRW1.26T in 1-yr Monetary Stabilization Bonds (MSB); avg yield 1.81% v 1.82% prior
• (KR) Bank of Korea (BOK) Gov Lee: KRW10T extra budget will have impact on growth - speaking in Parliament

China/Hong Kong

• Hang Seng opened -2.1%; Shanghai Composite opened -1.5%
• 386.HK Reports FY18 (CNY) 61.6B v 51.2B y/y; Op 82.3B v 71.5B y/y; Rev 2.89T v 2.36T y/y; Guides FY19 CAPEX CNY136.6B
• (CN) US said to note China initial offer related to digital trade was not sufficient; trade talks due to be held in China later this week - FT
• (CN) China plans to reduce the patent review time by 15% in 2019; review time for trademarks to be reduced to 5 months - Xinhua
• (CN) China PBoC Open Market Operation (OMO): Skips for 4th consecutive session; Net drains CNY60B v nil prior
• (CN) China PBoC sets yuan reference rate: 6.7098 v 6.6944 prior
• (CN) China PBOC Deputy Gov Pan: will increase transparency of yuan fixing
• (CN) China Vice Premier Zheng: China will continue to cut import taxes and create a first rate environment for foreign businesses as it opens up the economy - speaking at China Development Forum
• (CN) China Fin Min Liu Kun: Govt will speed up bond sales and the use of the funding to boost domestic demand - speaking at China Development Forum
• (CN) China faces $540B pension shortfall; must educate population about retirement – SCMP

Other

• (SG) Singapore Feb CPI M/M 0.5% v 0.6%e; Y/Y: 0.5% v 0.6%e
• (TH) Thailand Palang Pracharat party (backed by military) is ahead in the first election since 2014 coup, cites prelim result with 92% of the votes counted – Press

North America

• (US) US Attorney General Barr releases special counsel Mueller report findings: Finds no collusion with Russia on 2016 Presidential elections but falls short of calling him innocent; identifies two Russian influences
• TMO Confirms to Acquire Brammer Bio, a Leader in Viral Vector Manufacturing for $1.7B in cash; accretive to adj EPS by $0.10 in first full year
• (US) Fed Evans (dove, voter): Fed policy is neither accommodative nor restrictive at this point; its a good time to be cautious and pause; don't expect rate increase in H2 of 2020; Fed funds rate arguably close to neutral - speaking in Hong Kong

Europe

• (UK) 11 Cabinet Ministers have confirmed they want to replace PM May with her Deputy David Lidington; her behavior is being called into question - London Times
• (UK) Chancellor of the Exchequer Hammond (Fin Min): UK must find a way to leave the EU but replacing PM May will not help; second referendum is a perfectly coherent proposition which deserves to be considered – Sky
• (EU) ECB's Rehn (Finland): Euro zone growth has slowed down significantly and we must be worried; Brexit is the biggest threat to EZ in the short term - German press
• (TR) Turkey President Erdogan: Reiterates stance that those in finance sector who buy foreign currencies on the expectation of a TRY currency (Lira) decline will pay 'very heavy price' - financial press

Levels as of 1:20 ET

• Nikkei 225, -3.2%, ASX 200 -1.1%, Hang Seng -1.7%; Shanghai Composite -1.1%; Kospi -1.7%
• Equity Futures: S&P500 -0.5%; Nasdaq100 -0.7%, Dax -0.1%; FTSE100 -0.1%
• EUR 1.1306-1.1289 ; JPY 110.14-109.70 ; AUD 0.7087-0.7065 ;NZD 0.6886-0.6871
• Gold +0.3% at $1,322/oz; Crude Oil -0.8% at $58.55/brl; Copper flat at $2.848/lb

Market movers today

We have a number of important events this week, with most prominently a potential Brexit vote tomorrow or Wednesday, as well as several central bank speeches potentially addressing the recent dovishness from policymakers. US trade negotiators are heading to Beijing for another round of talks later this week and Chinese vice PM Liu He is set to go to DC on 3 April.

Today's highlight on the data front is the German Ifo for March. After last week's uptick in ZEW expectations investors are becoming on balance a bit less pessimistic on the Eurozone/Germany outlook. However, with the disappointing PMI manufacturing figures on Friday it is clear that the Germany is not out of the woods yet and challenges for the euro area recovery still lie ahead.

Selected market news

The global manufacturing cycle continues to shift into lower gear, as both Eurozone and US manufacturing PMIs eased further in March. In Europe, weaker external demand continues to drive the deterioration in companies' order books, which are back at the worst levels since 2012. Especially Germany remains at the epicentre of the Eurozone manufacturing slowdown, leading us to revise down our forecast for German Q1 GDP growth to 0.2% q/q (from 0.3% q/q previously)

Following disappointing data releases on both sides of the Atlantic markets are getting increasingly worried about the global cyclical stance. Both the EUR and the Scandi currencies were sold off and rates markets headed south. 10Y Bund yields moved below zero and in the US the yield curve has started to invert, with the 10Y Treasury yield falling below the 3M rate for the first time since 2007 - which historically has coincided with recession hitting within the next 12 months. However, the yield spread itself does not trigger an economic downturn and although the US industrial sector seems to have hit a rough patch - not being immune to global developments - we still think the US economy overall is in good shape and remains supported by fiscal stimulus this year. That said, we currently have a very strong combination of rapidly deteriorating global data combined with surprisingly soft rhetoric from the four major central banks, notable the Fed and the ECB. Hence, we see room for further fixed income performance and curve flattening this week. We continue to see 10Y Bund yields in a -10 to +15bp range the next couple of months and expect that we will soon move towards the lower end of that range.

This morning the sour risk sentiment seems to continue with Asian benchmarks in the red, while Brexit uncertainty remains elevated after reports that PM Theresa May is again facing pressure from her cabinet to resign. In the US risk sentiment might get a boost from news that US justice department special counsel Robert Mueller concluded that Donald Trump and his presidential campaign did not collude with Russia in an attempt to influence the 2016 election result.

For the 24 hours to 23:00 GMT, the EUR declined 0.69% against the USD and closed at 1.1296 on Friday, following downbeat manufacturing data across the euro area.

On the data front, the Euro-zone's flash manufacturing PMI unexpectedly eased to a level of 47.6 in March, contracting at its fastest pace in around six years and confounding market expectations for a rise to a level of 49.5. In the previous month, the PMI had recorded a level of 49.3. Moreover, the region's flash services PMI declined to a level of 52.7 in March, at par with market consensus and compared to a level of 52.8 in the prior month.

Separately, in Germany, the preliminary Markit manufacturing PMI unexpectedly fell to a level of 44.7 in March, contracting for the third consecutive month and compared to a reading of 47.6 in the prior month. Market participants had envisaged the PMI to climb to a level of 48.0. Further, the nation's flash services PMI slid to a level of 54.9 in March, compared to a level of 55.3 in the prior month. Market participants had anticipated the PMI to drop to a level of 54.8.

In the US, data indicated that the US the preliminary Markit manufacturing PMI unexpectedly dropped to a 21-month low level of 52.5 in March, defying market expectations for an advance to a level of 53.5. In the previous month, the PMI had recorded a reading of 53.0. Also, the nation's preliminary Markit services PMI eased to a level of 54.8 in March, overshooting market expectations for a fall to a level of 55.5. In the preceding month, the PMI had registered a level of 56.0.

On the other hand, the US existing home sales surged 11.8% on a monthly basis, to a level of 5.5 million in February, compared to a revised level of 4.9 million in the previous month. Market participants had envisaged existing home sales to rise to 5.1 million.

In the Asian session, at GMT0400, the pair is trading at 1.1298, with the EUR trading a tad higher against the USD from Friday's close.

The pair is expected to find support at 1.1250, and a fall through could take it to the next support level of 1.1203. The pair is expected to find its first resistance at 1.1368, and a rise through could take it to the next resistance level of 1.1439.

Looking forward, traders would keep an eye on Germany's IFO survey indices, for March, set to release in a few hours. Later in the day, the US Chicago Fed national activity index for February and the Dallas Fed manufacturing activity for March, will pique significant amount of investor's attention.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

BoJ board member Yutaka Harada hailed that the quantitative and qualitative easing (QQE) program boosted productivity and drove down unemployment rate. He said in a speech that "the biggest contribution QQE has made to Japan's economy was to boost its productivity." Also, "without QQE, Japan's jobless rate would not have fallen below 2.5 percent".

Harada is a persistent dissent in BoJ's monetary policy decisions. He complained regularly that allowing the long-term yields to move upward and downward to some extent was too ambiguous as the guideline for market operations. Also, he urged to introduce forward guidance that would further clarify its relationship with the price stability target.

For the 24 hours to 23:00 GMT, the GBP rose 0.60% against the USD and closed at 1.3197 on Friday, after European Union leaders granted a two weeks extension to Prime Minister Theresa May for ruling out the Brexit deal.

In the Asian session, at GMT0400, the pair is trading at 1.3193, with the GBP trading marginally lower against the USD from Friday’s close.

The pair is expected to find support at 1.3108, and a fall through could take it to the next support level of 1.3023. The pair is expected to find its first resistance at 1.3251, and a rise through could take it to the next resistance level of 1.3309.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD declined 0.73% against the JPY and closed at 109.97 on Friday.

In the Asian session, at GMT0400, the pair is trading at 109.84, with the USD trading 0.12% lower against the JPY from Friday’s close.

The pair is expected to find support at 109.42, and a fall through could take it to the next support level of 109.00. The pair is expected to find its first resistance at 110.55, and a rise through could take it to the next resistance level of 111.26.

With no macroeconomic releases in Japan today, investors would look forward to global macroeconomic releases for further directions.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.22% against the CHF and closed at 0.9941 on Friday.

In the Asian session, at GMT0400, the pair is trading at 0.9944, with the USD trading a tad higher against the CHF from Friday’s close.

The pair is expected to find support at 0.9916, and a fall through could take it to the next support level of 0.9888. The pair is expected to find its first resistance at 0.9971, and a rise through could take it to the next resistance level of 0.9998.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

For the 24 hours to 23:00 GMT, the USD rose 0.46% against the CAD and closed at 1.3427 on Friday.

Macroeconomic data showed that Canada's consumer price index (CPI) advanced 1.5% on an annual basis in February, surpassing market consensus for a gain of 1.4%. In the previous month, the CPI had registered a rise of 1.4%. Meanwhile, the nation's retail sales unexpectedly declined 0.3% on a monthly basis in January, defying market expectations for a rise of 0.4%. In the prior month, retail sales had registered a revised similar fall.

In the Asian session, at GMT0400, the pair is trading at 1.3429, with the USD trading slightly higher against the CAD from Friday's close.

The pair is expected to find support at 1.3374, and a fall through could take it to the next support level of 1.3319. The pair is expected to find its first resistance at 1.3462, and a rise through could take it to the next resistance level of 1.3495.

Amid lack of economic releases in Canada today, traders would focus on global macroeconomic events for further direction.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.