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Daily Pivots: (S1) 1.5955; (P) 1.6006; (R1) 1.6042; More....

Intraday bias in EUR/AUD is turned neutral as it failed to sustain above 1.6060 resistance and retreated. Some more sideway trading would be seen. On the upside, firm break of 1.6027 resistance will confirm completion of decline from 1.6765. Further rally should then be seen to retest 1.6765 high. On the downside, though, break of 1.5743 support will resume the decline from 1.6765.

In the bigger picture, as long as 1.5346 support holds, outlook will remain bullish. Uptrend from 1.1602 (2012 low) is expected to resume sooner or later. Break of 1.6765 will target 61.8% retracement of 2.1127 (2008 high) to 1.1602 at 1.7488 next. However, firm break of 1.5346 key support will indicate trend reversal, with bearish divergence condition in weekly MACD, and turn outlook bearish.

WTI oil futures have been trading above the short-term ascending trend line in the 4-hour chart but are consolidating in a narrow range over the last couple of weeks. The three-and-a-half month high of 57.85 acts as significant upper boundary of the channel while the 55.00 handle is the lower boundary.

Currently, the price remains below the 20- and 40-simple moving averages (SMAs) with very weak momentum. The technical indicators are supportive of this view as the RSI is neutral marginally below the 50 level and the MACD is flattening around the zero line.

In case of a successful penetration to the downside of the diagonal line and the 55.00 barrier, oil prices would switch the bullish bias to a more neutral one, resting at the 23.6% Fibonacci retracement level of the upward movement from 42.50 to 57.78 around 54.18. More downside extension could push the price until the 53.50 support, while even lower it could touch the 52.10 hurdle and the 38.2% Fibonacci of 52.00.

In the alternative scenario, a bullish rally could find immediate resistance near the 40- and the 20-SMAs but a jump above them could send prices until the 57.85 – 58.15 resistance area. More advances could drive WTI until 59.90 taken from the bottom on March 2018.

Overall, the short-term bias is in a bullish correction mode after the rebound from the 18-month low and a successful close above 57.85 could endorse this view.

Daily Pivots: (S1) 1.1309; (P) 1.1337; (R1) 1.1358; More...

EUR/CHF is still holding in range of 1.1310/1444 despite yesterday's dip. Intraday bias stays neutral for the moment. Further rise is in favor as long as 1.1310 support holds. On the upside, break of 1.1444 will resume the rebound from 1.1181 and target 1.1501 key resistance next. On the downside, firm break of 1.1310 will indicate completion of the rebound. In that case, intraday bias will be turned back to the downside for 1.1181 low again.

In the bigger picture, price actions from 1.2004 medium term top is seen as a correction only. Downside should be contained by 1.1154/98 support zone to complete it and bring rebound. Decisive break of 1.1501 (38.2% retracement of 1.2004 to 1.1173 at 1.1490) will confirm completion of the correction. Further rise should be seen to 61.8% retracement at 1.1687 and above next.

General Trend:

• Chinese markets fluctuate in early trade: IT and Property shares outperform, materials and financials lag
• China releases 2019 GDP, CPI targets (as expected) and outlines plans for the year
• Iron/Steel, Securities, Machinery and Electric Appliance companies weigh on Japanese market
• Softbank drops over 1%
• IHI declines over 3% in Japan, confirmed inspection related to engine parts
• Childcare firm Pigeon drops over 7% post earnings
• Fast Retailing and Adastri rise after respective monthly sales reports
• Consumer Discretionary and Resources companies weigh on the Australian equity market
• Australia Q4 exports data misses ests ahead of upcoming GDP report
• Little initial impact seen on markets from RBA statement
• Philippines Peso (PHP) weakens as CPI moves back within target

Headlines/Economic Data

Japan

• Nikkei 225 opened -0.5%
• (JP) Japan Fin Min Aso: Cashless points system will help increase spending overall and reduce demand volatility
• (JP) Reportedly Japan to ease competition rules on local bank mergers - Japanese press
• 7013.JP Confirms was inspected by Japan Transport Ministry. Reminder earlier: 7013.JP Japan Transport Ministry has probed IHI over allegations it assigned unqualified workers to check aircraft engines – Nikkei
• (JP) Japan Feb PMI Services: 52.3 v 51.6 prior; PMI Composite: 50.7 v 50.9 prior
• (JP) Japan and Turkey expect a board trade deal agreement in June – Nikkei
• 2811.JP To raises prices on large bottle drinks by 5-10%
• (JP) Japan MoF sells ¥2.2T v ¥2.2T indicated in 0.10% (prior 0.10%) 10-yr JGBs, avg yield -0.002% v -0.013% prior, bid to cover 4.25x v 4.80x prior
• 7201.JP Former Chairman Ghosn could be released by as early as today, Tokyo court accepted his bail application; bail has been set at ¥1.0B (~$8.9M) - Japanese Media

Korea

• Kospi opens -0.4%
• (KR) SOUTH KOREA FEB CPI M/M: 0.4% V 0.7%E; Y/Y: 0.5% V 0.7%E; CPI Core y/y: 1.3% v 1.1%e
• (KR) SOUTH KOREA Q4 FINAL GDP Q/Q: 1.0% V 1.0%E; Y/Y: 3.1% V 3.1%E; 2018 GDP y/y 2.7% (6-year low) v 2.7% prelim
• (KR) Moody's cuts 2019 and 2020 GDP outlook for South Korea: Cuts 2019 GDP outlook from 2.3% to 2.1%; Cuts 2020 GDP outlook from 2.5% to 2.2%
• (KR) South Korea special envoy on nuclear issues with North Korea will travel to US for talks this week – Yonhap
• (KR) South Korea sells KRW1.75T v KRW1.75T indicated in 30-yr Govt Bonds; avg yield 2.075% v 2.085% prior

China/Hong Kong

• Hang Seng opens -0.5%; Shanghai Composite opens -0.3%
• (CN) CHINA NPC: SETS 2019 GDP TARGET AT 6.0-6.5% v ~6.5% in 2018; CPI ~3.0% v ~3.0% in 2018 (both inline with expectations); Fiscal policy to be proactive, monetary policy to be prudent; cuts VAT for some sectors and top bracket
• (CN) China may announce 3.0% cut to manufacturing VAT rate this week, which could add 0.6% to GDP this year - financial press
• (CN) CHINA FEB CAIXIN PMI SERVICES: 51.1 V 53.5E; PMI Composite: 50.7 v 50.9 prior
• 293.HK In talks to acquire shares in Hong Kong Express Airways and Hong Kong Airways from HNA Group, no deal reached yet
• (CN) China PBOC Open Market Operation (OMO): Skips OMO v skipped prior (4th consecutive skip); Net: CNY120B drain v CNY40B prior
• (CN) China PBoC sets Yuan Reference Rate: 6.6998 v 6.7049 prior
• (CN) China SASAC Official Xiao: Has not discussed plan to merge 3 state automakers; planning additional support for auto industry
• (CN) China Banking and Insurance Regulatory Commission (CBIRC) Chief Guo Shuqing: China did not manipulate yuan or engage in competitive devaluation of yuan; China and US can reach an agreement on opening financial sector
• (CN) China Commerce Min Zhong Shan: Some areas in trade talks have achieved a breakthrough; Working teams from both sides are talking right now
• (CN) Former PBOC Adviser Li: Exchange rate risk controllable this year
• (CN) China Agri Min: To give corn and soybean subsidies in 2019

Australia/New Zealand

• ASX 200 opened -0.1%
• (AU) AUSTRALIA Q4 BOP CURRENT ACCOUNT BALANCE (A$): -7.2B V -9.2BE; NET EXPORTS OF GDP: -0.2% V -0.1%E
• (AU) RBA LEAVES CASH RATE TARGET UNCHANGED AT 1.50%; AS EXPECTED; No notable changes in wording, affirms GDP and inflation outlooks
• (AU) Australia Feb AiG Performance of Services Index: 44.5 v 44.3 prior
• COL.AU Enters 50/50 JV with Australian Venue Co related to Coles' Hotels and Queensland Retail Liquor business, to receive cash A$200M at completion of deal
• (AU) Australia Feb Final PMI Services: 48.7 v 49.3 prelim; PMI Composite: 49.1 v 49.7 prelim
• NEM.AU Confirms rejection of Barrick bid; Goldcorp combination represents superior value creation opportunity; Provides long term guidance

Other Asia

• (SG) Singapore Feb PMI: 49.8 v 50.1 prior
• (IN) President Trump: India has not assured US that it will provide 'equitable and reasonable' access to Indian markets
• (PH) PHILIPPINES FEB CPI M/M: +0.1% V -0.6% PRIOR; Y/Y: 3.8% V 4.0%E

North America

• (US) According to NY Fed economist study, tariffs have cost US firms and consumers $3.0B in additional tax costs, and companies an additional $1.4B in deadweight losses. A separate study noted farmers and blue collar workers in areas that voted for Trump had been the biggest victims of the tariffs.

Europe

• OPEC sources: Unlikely to make any output policy decision at its April meeting; more likely to do so in June – press
• (UK) FEB BRC LFL SALES Y/Y: -0.1% V 0.1%E
• (UK) Trade Secretary Liam Fox cancels Brexit briefings - FT

Levels as of 12:50ET

• Hang Seng -0.3%; Shanghai Composite 0.0%; Kospi -0.8%; Nikkei225 -0.6%; ASX 200 -0.4%
• Equity Futures: S&P500 -0.1%; Nasdaq100 -0.0%, Dax +0.1%; FTSE100 +0.1%
• EUR 1.1326-1.1352; JPY 111.73-111.95; AUD 0.7067-0.7093; NZD 0.6790-0.6828
• Commodity Futures: Gold +0.2% at $1,289/oz; Crude Oil -0.5% at $56.31/brl; Copper +0.8% at $2.93/lb

Market movers today

Focus continues to be on news on the US-China trade front as we close in on a deal and meeting between US President Donald Trump and Chinese President Xi Jinping. When we get a date for the summit between the two it should be clear a deal will be made.

The National People's Congress in China that kicked off overnight will also be watched for any announcements on new stimulus and signs on the reform side. Some first hints regarding this overnight; see below.

On the data front, we have service PMI and retail sales out of the euro area and ISM non-manufacturing and new home sales in the US. The service sector has generally held up well lately whereas the weak link globally has been the manufacturing sector.

In Sweden, it's time for service PMI, industrial orders and our own home price indicator (tenant-owned flats in Stockholm), see page 2.

Selected market news

Risk sentiment was weighed down by Chinese announcements of lower growth targets despite new stimulus overnight (see below). Overnight, the Reserve Bank of Australia (RBA) kept its cash target rate unchanged at 1.50% as widely expected. The policy rate has been unchanged for the past three years as Chinese deceleration and a weak property market are taking their toll on the Australian economy. Meanwhile, whereas the Japanese services PMI rose to 52.3 (from 51.6), the Chinese Caixin PMI fell to 51.1 (from 53.6), which was somewhat weaker than expected (53.5). This further helped dampen risk appetite.

Equities posted losses in both the US and Asian sessions, with the Dow Jones industrial down close to 0.8% while the Nikkei was 0.6% lower on the day, at the time of writing. The USD has continued to strengthen with EUR/USD below 1.1350, even if the uptick in US yields over the past week came to a halt with the 10Y Treasury yield closing around 2.72%. Brent crude oil steady around USD65.50/bbl while copper prices - a good indicator of Chinese sentiment - recovered a tad.

Ahead of the National People's Congress, Chinese premier Li made a series of announcements overnight. First, the Chinese authorities released new GDP growth targets, which were lowered to the 6.0-6.5% range for 2019 (vs 6.5% for 2018), i.e. accommodating a continued deceleration in growth. At the same time, it was also underlined that 'prudent' monetary policy and 'proactive, stronger, and more effective 'fiscal policy will be pursued going forward with a target budget deficit of 2.8% of GDP (vs 2.6% last year). Further, VAT cuts were announced and significant tax relief was pledged for the industrial sector with tax and social security fees set to be reduced by CNY2tr. On the whole, this suggests that China is preparing for a continued slowdown in growth, but also that the Chinese authorities remain ready to stimulate to avoid a hard landing, even with a trade deal in sight.

For the 24 hours to 23:00 GMT, the EUR declined 0.26% against the USD and closed at 1.1337.

On the data front, the Euro-zone's Sentix investor confidence index jumped to a level of -2.2 in March, compared to a level of -3.7 in the prior month. Market participants had envisaged the index to rise to a level of-3.1. Moreover, the region's producer price index (PPI) rose 3.0% on an annual basis in January, surpassing market expectations for a gain of 2.9%. In the prior month, the PPI had registered a similar rise.

In the US, data showed that the US construction spending unexpectedly fell by 0.6% on a monthly basis in December, defying market consensus for a rise of 0.2% and compared to an advance of 0.8% in the previous month.

In the Asian session, at GMT0400, the pair is trading at 1.1327, with the EUR trading 0.09% lower against the USD from yesterday's close.

The pair is expected to find support at 1.1301, and a fall through could take it to the next support level of 1.1275. The pair is expected to find its first resistance at 1.1361, and a rise through could take it to the next resistance level of 1.1395.

Going forward, traders would closely monitor the Euro-zone's retail sales for January, along with the final Markit services PMI for February, scheduled to release across the euro bloc in a few hours. Later in the day, the Markit services PMI for February and new home sales data for December, will keep investors on their toes. Additionally, the US monthly budget statement for January, will garner significant amount of investors' attention.

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

For the 24 hours to 23:00 GMT, the GBP declined 0.42% against the USD and closed at 1.3180.

Macroeconomic data showed that UK's construction PMI declined to a level 49.5 in February, declining for the first time in 11 months and compared to a reading of 50.6 in the prior month. Market participants had anticipated the PMI to fall to a level of 50.5.

In the Asian session, at GMT0400, the pair is trading at 1.3154, with the GBP trading 0.20% lower against the USD from yesterday's close.

Overnight data indicated that UK's BRC retail sales across all sectors unexpectedly dropped 0.1% in February, defying market consensus for an advance of 0.1%. The BRC like-for-like sales had registered a rise of 1.8% in the prior month.

The pair is expected to find support at 1.3119, and a fall through could take it to the next support level of 1.3085. The pair is expected to find its first resistance at 1.3221, and a rise through could take it to the next resistance level of 1.3289.

Moving ahead, investors would keep an eye on UK's Markit services PMI for February, set to release in a few hours.

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

For the 24 hours to 23:00 GMT, the USD declined 0.21% against the JPY and closed at 111.75.

In the Asian session, at GMT0400, the pair is trading at 111.90, with the USD trading 0.13% higher against the JPY from yesterday's close.

Overnight data revealed that Japan's Nikkei services PMI advanced to a level of 52.3 in February, following a reading of 51.6 in the previous month.

The pair is expected to find support at 111.69, and a fall through could take it to the next support level of 111.49. The pair is expected to find its first resistance at 112.05, and a rise through could take it to the next resistance level of 112.21.

In absence of key economic releases in Japan today, investor sentiment would be determined by global macroeconomic events.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD slightly declined against the CHF and closed at 0.9992.

In economic news, Switzerland’s total sight deposits eased to a level of CHF576.4 billion in the week ended 01 March, from CHF576.5 billion in the previous week.

In the Asian session, at GMT0400, the pair is trading at 0.9999, with the USD trading 0.07% higher against the CHF from yesterday’s close.

The pair is expected to find support at 0.9983, and a fall through could take it to the next support level of 0.9966. The pair is expected to find its first resistance at 1.0018, and a rise through could take it to the next resistance level of 1.0036.

Trading trend in the Swiss Franc today, is expected to be determined by Switzerland’s consumer price index for February, scheduled to release in a while.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the USD rose 0.16% against the CAD and closed at 1.3312.

In the Asian session, at GMT0400, the pair is trading at 1.3324, with the USD trading 0.09% higher against the CAD from yesterday’s close.

The pair is expected to find support at 1.3287, and a fall through could take it to the next support level of 1.3249. The pair is expected to find its first resistance at 1.3350, and a rise through could take it to the next resistance level of 1.3375.

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