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BoJ deputy governor nominee Masazumi Wakatabe in upper house confirmation hearing:

• "There are various things the BOJ can do under its yield curve control policy. It can strengthen its existing tool kit, or could come up with a new policy."
• "The BOJ shouldn't be bound by a set timeframe" for meeting the 2% inflation target.
• "Its policy should be data-dependent, not date-driven."
• Planned sales tax hike in fiscal 2019 is the important considering on whether more easing is needed

Another deputy nominee Masayoshi Amamiya said in the same occasion:

• BoJ has ample tools for smooth stimulus exit when time comes.
• But there is still a distant to 2% inflation target.
• BoJ needs to continue with powerful monetary easing patiently

No clear winner this week so far. Yen trades generally higher today. But that's mainly because rebound in Yen crosses lost steam. While Euro is strongest for the week, there is not much follow through buying.

Nonetheless. CAD is the clear loser so far, as the weakest for the week and stays pressured today.

BoC rate decision is a focus later today. Based on uncertainty around NAFTA and Trump's steel and aluminum tariffs, there is practically no chance for another hike today. And, further, there is little chance for BoC to sound anything but cautious.

EUR/CAD is a pair to watch today as it's set to take on 1.6103 key resistance (2016 high). Firm break there will resume long term rebound from 2012 low at 1.2126. Next medium term target will be 161.8% projection of 1.3782 to 1.5257 from 1.4441 at 1.6828.

Daily Pivots: (S1) 146.61; (P) 147.31; (R1) 148.06; More...

Intraday bias in GBP/JPY remains neutral as recovery from 144.97 temporary low is in progress. While further rise cannot be ruled out, upside should be limited below 150.92 resistance to bring another decline. Break of 144.97 will extend the fall from 156.69 to 143.51 medium term fibonacci level next. We'll look for bottoming signal there. But firm break will target 139.29 support.

In the bigger picture, the case for medium term reversal continues to build up. There is bearish divergence condition in daily MACD. 146.96 support was taken out. And GBP/JPY was rejected by 55 month EMA. Break of 38.2% retracement of 122.36 to 156.59 at 143.51 will pave the way to 61.8% retracement at 135.43 and below. This will now be the preferred case as long as 150.92 resistance holds.

Daily Pivots: (S1) 130.82; (P) 131.41; (R1) 132.23; More....

We're favoring the case that a short term bottom is formed at 129.34 already, on bullish convergence condition in 4 hour MACD. Further rise is now expected to 38.2% retracement of 137.49 to 129.34 at 132.45. Break will target 61.8% retracement at 134.37. However, decline 137.49 shouldn't be finished yet. We'd still expect another fall at a later stage. And break of 129.34 will pave the way to 126.61 medium term fibonacci level

In the bigger picture, current development argues that rise from 109.03 has completed at 137.49, on bearish divergence condition in weekly MACD. Deeper fall should be seen to 38.2% retracement of 109.03 to 137.49 at 126.61 first. On the upside, break of 137.49 is needed to confirm medium term rise resumption. Otherwise, risk will now stay on the downside even in case of strong rebound.

Fed's Brainard suggests greater confidence in reaching inflation target; tailwinds could speed up rate hike pace (Note: Brainard is seen as dovish by some)

Fed's Brainard and Kaplan comment on possible trade impact

AUD/JPY underperforms: Q4 GDP below ests

RBA Gov Lowe reiterates there is no strong case for a near-term policy adjustment; likely that next RBA rate move will be up

China PBoC conducts 1-year MLF facility at unchanged rate; skips daily OMO for third straight session

China Finance Ministry official suggested drafting process has started for property tax bill

Cold weather conditions in the US Northeast in focus: NY's JFK to cancel ~250 flights on Wed

BoJ Dep Gov Nominees continue testimonies

India's government starts to question banks on business man Nirav Modi amid fraudulent transactions scandal.

Australia/New Zealand

ASX 200 opened -0.2%: closed: -1%

ASX 200 Energy Index -1.4%, Financials -1.1%, Utilities -1%

(AU) Australia Q4 GDP Q/Q: 0.4% v 0.5%e (slowest since Q1 2017); Y/Y: 2.4% v 2.5%e

(AU) Australia Treasurer Morrison: Q4 GDP data shows Australia not immune to global influences; Net exports were the main drag on the data

(AU) RBA Gov Lowe: Reiterates there is no strong case for a near-term policy adjustment; likely that next RBA rate move will be up - comments in Sydney

(AU) Australia sells A$500M v A$500M indicated in 4.75% April 2027 bonds, avg yield: 2.7391%, bid to cover: 3.85x

(AU) Australia PM Turnbull: Election to be held in H1 of 2019

(NZ) NEW ZEALAND Q4 VOLUME OF ALL BUILDINGS Q/Q: 1.4% V 1.0%E

China/Hong Kong

Shanghai opened flat, Hang Seng -0.6%

Hang Seng Materials Index -2%, Energy -1.7%, Info Tech -0.9%, Financials -0.7%, Property/Construction -0.6%

Shanghai Composite Property Sub-declines less than 1%

(CN) PBOC CONDUCTS 1-YEAR CNY105.5B MEDIUM-TERM LENDING FACILITY (MLF) OPERATION: Interest rate unchanged at 3.25%

(CN) China PBoC Open Market Operation (OMO): Skips OMO for third straight session

(CN) China Vice Finance Min: NPC and other departments are drafting the property tax bill; Will reasonably design property tax system

(CN) China Feb New Loans may decline m/m to less than CNY1T compared to Jan record level of CNY2.90T (in-line with analyst views) - China Securities Journal

(CN) China End 2017 Outstanding Government Debt CNY29.95T; Debt-to-GDP ratio 36.2% v 36.7% y/y – MOF

(CN) China announces new rules related to equity stakes in insurers, to take effect on April 10th

(CN) China: To release surveyed jobless rate data monthly from April

Looking Ahead: Looking Ahead: China FX reserves expected to be released during European session

Japan

Nikkei 225 opened -0.7%; closed -0.8%

TOPIX Iron & Steel Index -2.2%, Electric Appliances -1.1%

(JP) BoJ Dep Gov Nominee Wakatabe: Won't automatically propose more easing, but does not exclude proposing extra easing

(JP) BoJ Dep Gov Nominee Amamiya ('Mr BoJ'): Reiterates Japan economy making progress toward CPI goal

(JP) Japan Feb Official Reserve Assets: $1.26T v $1.27T prior

(JP) Ripple said to develop blockchain payment app with banks in Japan - US financial press

Looking Ahead: Looking Ahead: Japan Q4 GDP revision due for release on Thursday

Korea

Kospi opened +0.1%

Samsung Electronics rises over 2%

(KR) North Korea said to be open to denuclearize if regime safety is guaranteed and not use any weapons against South Korea – financial press

(KR) South Korea said to closely monitor for possible rise in FX volatility - South Korea Press

(KR) South Korea parliament to hold hearing on Bank of Korea (BoK) Gov Lee on Wed, March 21st - South Korean Press

(KR) US imposes new sanctions on North Korea in relation to the assassination of Kim Jong Nam; Kim Jong Nam was the half brother of North Korea Leader Kim Jong Un. - FT

Other Asia

(TW) Taiwan's Advanced Semiconductor Engineering [2311.TW] said to receive orders from Bitmain, says a Taiwanese press report

North America

US equity markets closed mostly higher: Dow flat, S&P500 +0.3%, Nasdaq +0.6%, Russell 2000 +1%

S&P500 Materials +1.1%; Utilities -1.3%

(US) White House economic adviser Gary Cohn to resign; Expected to leave in next few weeks - NYT

( US) Andrew Puzder said to be considered as replacement for Cohn, says US financial press; Separate report suggests Adviser Peter Navarro and Larry Kudlow are said to be the top two candidates to replace Cohn

(US) President Trump said that he will be making a decision soon on the appointment of a new Chief Economic Advisor, says 'many' people want the job.

(US) Fed Brainard (voter): Has greater confidence Fed to achieve 2% inflation target; tailwinds could speed up pace of rate hikes

(US) Fed's Kaplan (non-voter, dove): Trade discussion has not changed my outlook; Reiterates expects Fed to hike three times this year and should get started soon

(US) House Speaker Ryan: Section 232 protocol is a little broad; urges administration to make potential tariffs narrower

(US) Senate Maj Leader McConnell (R-KY): there is a lot of concern among GOP Senate caucus that steel/aluminum tariffs could spark trade war

(US) OPEC Sec Gen Barkindo: supply is good but demand is even more robust - CNBC interview

(US) Weekly API Oil Inventories: Crude: +5.7M v 0.9M prior

Looking ahead: US Feb ADP Nonfarm Employment change expected to be released, along with the Bank of Canada (BoC) interest rate decision and weekly US DOE Crude Oil Inventories

Europe

(UK) EU internal report argues that UK PM May is 'double cherry-picking' on Brexit and calls her model unworkable; Report dismissed May's Brexit speech as "being more about Conservative Party management than putting forward sensible solutions on trade" - UK press

Telecom Italia [TIT.IT]: Reports Q4 Rev €5.1B v €5.1B y/y

Looking Ahead: UK Annual Budget expected to be released

Levels as of 01:00ET

Hang Seng -0.9%; Shanghai Composite -0.2%; Kospi -0.2%

Equity Futures: S&P500 -1.3%; Nasdaq100 -1.2%, Dax-1.1 %; FTSE100 -0.8%

EUR 1.2402-1.2430 ; JPY 105.45-106.23; AUD 0.7771-0.7831 ;NZD 0.7275-0.7302

Feb Gold flat at $1,334/oz; Feb Crude Oil -0.8% at $62.09/brl; Mar Copper -0.4% at 3.145$/lb

Market movers today

Focus remains on US trade policy and Italian politics while the market awaits the ECB meeting tomorrow and the US employment report on Friday. Today, US ADP employment for February is up for release. It is expected to rise 200k after an increase of 234k in January. However, it is not a very good indicator for the non-farm payrolls. Also, the most watched component of the employment report on Friday will be wage growth after the upward surprise last month.

US trade balance is also due out today. In December, the trade deficit increased to the highest level in nine years adding insult to injury to the issue of US trade imbalances. We have dived in to US trade policy, what Trump's focus on protectionism me an s for the economy and markets and what to expect from here in this piece released this morning: Research US: Symbolic protectionism with limited impact on growth and inflation but risks.

At the Bank of Canada meeting today, rates are expected to stay unchanged at 1.25%.

The Swedish Debt Office is releasing the budget balance for February, see next page.

Selected market news

Markets continue to focus on US trade policy after Trump's e conomic advisor, Gary Cohn, announced late last night that he has resigned. The reason is the ongoing discussions on trade policy where he strongly disagrees with Trump, as he sees the proposed tariffs as being unfriendly to business. Gary Cohn 's resignation means it is more likely that we will see a formal decision to impose tariffs on steel and aluminium next week.

In addition, Bloomberg wrote a story that the next step for the Trump administration is targeting China by imposing tariffs on Chinese imports and limiting Chinese investments in US businesses. It is not a surprise Trump wants to target China, as the US runs the largest trade deficit with China and the investigat ion of Chinese theft of intellectual property rights have been ongoing since August 2017. St ill, it is noteworthy that the story is being more concrete than what we have seen before. For instance, in the most severe scenario, the US could impose tariffs on imports of Chinese-produced clothing and electronics, according to the story. On the investment side, the US may prohibit Chinese takeovers in sectors, where US companies cannot access the Chinese market . The investigation on China is expected in the coming weeks. As with tariffs on steel and aluminium, we expect any measures taken against China to be small in magnitude, meaning this is more about politics than economics. There is a risk we are being too optimistic and that we are heading for a full -blown global trade war.

More protectionist US is bad for global risk sentiment and the Asian markets are flashing red. The bad mood came after a positive day for risk yesterday with the stories that North Korea is willing to discuss disarmament and that the Republican establishment is pushing back on the protectionist agenda. S&P500 futures are trading 1.1% lower and yields on US 10-year Treasuries have fallen 4bp. More interestingly, we have also seen a small weakening of the USD and EUR/USD is now trading at 1.2420.

Daily Pivots: (S1) 0.8908; (P) 0.8926; (R1) 0.8948; More...

With 0.8877 minor support intact, further is expected in EUR/GBP/ Prior break of 0.8928 resistance indicates near term trend reversal. Decline from 0.9305 has completed at 0.8686 after hitting 61.8% retracement of 0.8312 to 0.9305. Further rise should be seen back to 61.8% retracement of 0.9305 to 0.8686 at 0.9069. Firm break there will target retest of 0.9305 high. On the downside, below 0.8877 minor support will dampen this bullish view and target 0.8771 support instead.

In the bigger picture, there are various ways to interpret price actions from 0.9304 high. But after all, firm break of 0.9304/5 is needed to confirm up trend resumption. Otherwise, range trading will continue with risk of deeper fall. And in that case, EUR/GBP could have a retest on 0.8303. But we'd expect strong support from 0.8116 cluster support (50% retracement of 0.6935 to 0.9304 at 0.8120) to contain downside.

Daily Pivots: (S1) 1.5807; (P) 1.5859; (R1) 1.5895; More....

EUR/AUD reaches as high as 1.5976 so far and met mentioned target of 61.8% projection of 1.5258 to 1.5816 from 1.5626 at 1.5971. Intraday bias stays on the upside and break of 1.5971 will target 100% projection at 1.6184 next. On the downside, below 1.5823 minor support will turn intraday bias neural first. But near term outlook will remain bullish as long as 1.5626 support holds.

In the bigger picture, medium term rise from 1.3624 is still in progress for 1.6587 key resistance. At this point, we'd be cautious on strong resistance from there to limit upside. But decisive break will confirm resumption of long term rise from 1.1602. On the downside, break of 1.5153 support is needed to indicate completion of the medium term rise. Otherwise, outlook will remain bullish in case of pull back.

The world of cryptocurrencies is continuing to grow. Late last year, CME Group and CBOE listed bitcoin futures in a bid to get more institutional investors to invest in blockchain technology.

Yesterday, popular cryptocurrencies exchange, Coinbase announced that it would be launching a new cryptocurrencies index fund. The fund will be the new product from Coinbase’ asset management division which the company announced a few months ago. It will be open to accredited American investors, who will need to invest a minimum of $10,000. During launch, the index fund’s weightings will be 62% Bitcoin, 27% Ethereum, 7% Bitcoin Cash, and 4% Litecoin.

There is a likelihood that other crypto exchanges will start their own index funds to target the same market targeted by Coinbase.

Meanwhile, Bitcoin’s volatility has slowed in the last couple of weeks, with the currency avoiding the large price moves we were used to. For two weeks, the BTC/USD pair has traded in the range of $11,710 and $9279. At this point, it will take a major news to accelerate or end the rally.

The British pound trades close to the 1.3900 handle against the greenback on Wednesday, as the departure of the United States top-economic advisor Gary Cohn continues to pressure the U.S dollar lower. The GBPUSD pair has seen four-straight days of trading gains, with price-action so far finding interim resistance from the 1.3930 technical level. Technical traders look towards the key resistance at the 1.3977 level, while fundamental traders await the release of the U.S ADP jobs report for the month of February.

The GBPUSD pair is intraday bullish whilst trading above the 1.3834 level, key resistance is now found at the 1.3934 and 1.3977 levels.

If GBPUSD price-action falls below the key 1.3834 support level, a deeper decline towards the 1.3765 level may occur.