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The Japanese yen extends this week's broad based rally even though markets stabilized elsewhere. US President Donald Trump will be facing his first legislative test today. House will vote on Trump's American Health Care Act for replacing so called Obamacare. As Chair of the House Freedom Caucus, Mark Meadows, suggested, there are still insufficient votes to pass the bill but the chance appears to have improved. Meanwhile, there are also reports that there could be more than 25 Republicans opposing the bill. And only 23 is needed to join the Democrats to reject the AHCA. A defeat in House today will further raise the doubts on Trump's ability to push through his economic policies. And the reverse Trump trade that we see in the selloff in US stocks this week could accelerates. Released from US, Initial jobless claims rose 15k to 258k in the week ended March 18, above expectation of 240k. Continuing claims dropped -39k to 2m in the week ended March 11.

ECB: Survey results suggest robust recovery

ECB said in its monthly economic bulletin that recovery in the region is gaining ground with robust momentum. The central bank noted that "incoming data, notably survey results, have increased the Governing Council's confidence that the ongoing economic expansion will continue to firm and broaden." Besides, "surveys point to a robust growth momentum in the first quarter of 2017." Nonetheless, regarding inflation, ECB said that wage growth remained sluggish by historical standard. And, "on contrast to energy inflation, the expected pick-up in (headline) inflation excluding energy and food is likely to be much more gradual." Also, "there are only weak signs of upward pipeline price pressures."

SNB spent CHF 67.1b in intervention

SNB noted in its annual report published today that CHF 67.1b was spent in currency intervention last year. That's notably lower than 2015's total at CHF 86.1b when the EUR/CHF floor was removed. Also it's around one-third of the record of CHF 118b spent back in 2012. The central bank also noted that "these interventions occurred mainly at times of heightened uncertainty, when the Swiss franc was particularly sought after as a safe investment."

Released in Europe, German Gfk consumer sentiment dropped 0.2 pts to 9.8 in April. UK retail sales rose 1.4% mom in February. UK CBI reported sales was unchanged at 9 in March.

RBNZ Maintained Neutral Bias, Likely On Hold Throughout 2017

As widely anticipated, RBNZ left the OCR unchanged at 1.75% and maintained the neutral bias in the monetary policy stance. Domestic economic developments remained upbeat with rising inflation and positive growth outlook. Policymakers attributed weaker-than-expected 4Q17 GDP to temporary factors. The central bank acknowledged the recent depreciation in trade-weighted exchange rate. Yet, it reiterated that a weaker kiwi would be needed for more balanced growth. RBNZ warned that geopolitical uncertainty remained the biggest challenge in the global economic development. We expect RBNZ would stand on the sideline throughout the year. More in RBNZ Maintained Neutral Bias, Likely On Hold Throughout 2017

China Money Market Conditions Remain Fragile

China's financial system continues to display fragility and liquidity squeeze. China's 7-day repo rate jumped to 5.5% (close), the highest level since late 2014, on Tuesday, followed by PBOC's injection of RMB 80-90B to the market on Wednesday as some small banks failed to repay debts in the interbank market. Less than a week ago, PBOC raised a range of short-term and medium-term interest rates to reduce financial risks, thought to be a response to Fed funds rate hike. Interbank rates should remain volatile over the coming week, ahead of PBOC's quarterly macro-prudential assessment in late March. Although recent data suggested that the problem of capital outflow eased in February, ongoing interest rate normalization in the US would prolong China's capital outflow problem, sustaining the challenges facing China in the implementation of its monetary policy. More in China Money Market Conditions Remain Fragile.

USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 110.67; (P) 111.22; (R1) 111.72; More...

USD/JPY's decline from 115.49 is still in progress for the moment. Sustained trading below 111.12/13 cluster support (61.8% projection of 118.65 to 111.58 from 115.49 at 111.12 and 38.2% retracement of 98.97 to 118.65 at 111.13) will pave the way to 100% projection at 108.42. Nonetheless, rebound from there current level, and break of 112.86 resistance will indicates completion of the correction from 118.65. In such case, intraday bias will be turned back to the upside for 115.49 resistance and above.

In the bigger picture, price actions from 125.85 high are seen as a corrective pattern. The impulsive structure of the rise from 98.97 suggests that the correction is completed and larger up trend is resuming. Decisive break of 125.85 will confirm and target 61.8% projection of 75.56 to 125.85 from 98.97 at 130.04 and then 135.20 long term resistance. Nonetheless, sustained trading below 55 week EMA (now at 111.12) will extend the consolidation from 125.85 with another fall through 98.97 before completion.

Economic Indicators Update

Spot Gold remains steady on Thursday and is consolidating under fresh three-week high at $1251, posted on Wednesday.

The yellow metal maintains strong bullish sentiment on recent risk-off mode and increased demand for safe-haven assets, being in steep ascend for six consecutive days.

Today's events, vote for US healthcare plan and speech of Fed Chair Yellen, could generate stronger signals.

Technical studies remain in strong bullish setup, however, overbought slow stochastic on daily chart and bearish divergence of 4-hr chart slow stochastic, may signal that strong rally from $1195 trough is running out of steam.

Top of thickening hourly chart that underpins near-term action, currently lies at $1243 (also Wednesday's low) and needs to hold dips to keep bulls in play for renewed attempt higher.

Sustained break above $1251 barrier is needed to open targets at $1260/63 (200SMA / 27 Feb high).

Otherwise, penetration into hourly cloud would risk weakness towards next pivot at $1237 (hourly cloud base / broken Fibo 61.8% of $1263/$1195 downleg).

Res: 1251; 1258; 1260; 1263
Sup: 1243; 1237; 1229; 1226

• GBP higher but is the retail sales data as good as the February number suggests?
• Trump's healthcare vote could be key to markets in coming days;
• Will Yellen continue with dovish post-hike message?

US equity markets are on course to open a little higher on Thursday, with traders paying close attention to Congress and the upcoming vote on Donald Trump's healthcare bill, while in the UK the pound has been lifted by the latest retail sales data, perhaps wrongly.

The pound is trading slightly higher on the day after retail sales data for the UK rose more than expected in February, although it wasn't all good news with the January data being revised lower. The ONS reported that the underlying pattern is less positive again with the three month on three month movement falling by 1.4% for the second month in a row, the largest drop in seven years.

It would appear that while February was a good month for the consumer, the trend is both disappointing and concerning. The substantial depreciation of the pound since the June referendum combined with rising oil prices is eating away at people's disposable income and the cracks are starting to appear. With the consumer being so important to the UK economy, the first quarter GDP figures could offer real insight into what kind of a year it's going to be for the country, with the impact of the currency moves only just starting to be felt.

Attention will now shift to the US as Trump works hard to push his healthcare plans through Congress with a vote expected in the next couple of days. Trump's difficulty in getting people on board with his plans was largely blamed for the market selling off earlier in the week, with investors apparently seeing this as a sign that Trump may also struggle to get his spending plans and tax changes through. Should the healthcare plan be approved by Congress then we could see a resumption of the Trump rally while a failure could leave markets vulnerable to a larger correction.

Traders will also be focused on what Federal Reserve policy makers have to say today, particularly Chair Janet Yellen, who is due to appear prior to the US open. Policy makers have erred on the dovish side since they raised interest rates last week which has weighed on the dollar and seen the odds of further rate hikes this year pared back. The market implied odds of a rate hike is June has now fallen below 50% while two rate hikes this year is a coin toss. We may have to get used to this kind of behaviour from the Fed this year with sudden coordinated hawkish turns ahead of rate hike meetings followed by more cautious dovish messages after in order to manage market expectations.

Thursday March 23: Five things the markets are talking about

This week's global equities selloff has eased in the overnight session as the market steps back before today's key U.S vote on Trump's healthcare bill.

Market sentiment is being dictated to by this piece of legislation - the House votes this evening. The fact that the President is struggling to push his bill has raised raised doubts over whether he can win support for his pro-growth economic policy measures.

Press reports late Wednesday suggests that the White House is considering concessions to the right wing of the party to help the bill through the house.

This is the markets litmus test - if the healthcare bill does actually stall, the Trump 'reflation' trade will again come under threat - stocks, yields and dollar lower.

Note: The timing of this evening's vote has not been set.

1. Global stocks see mixed results

This week's equity selloff was the biggest for stocks since the November U.S election. To date, they have largely escaped the markets efforts this year to unwind the "Trump trade."

Note: While the dollar has fallen -4.4% ytd, global stocks have climbed to new record highs.

In Japan, the Nikkei edged a tad higher overnight (+0.2%), up from its two-month low, as support from a weaker yen (yesterday's ¥110.75 print was a four -month low) helped offset a political scandal centered on PM Abe's wife. The broader Topix was little changed.

In Hong Kong, benchmark stock index struggled as strength in Chinese real estate developers was offset by weakness in some blue chips - earnings reports disappointed. The Hang Seng ended flat. The index is up +10% ytd and market is questioning valuations.

In China, stocks rebounded, but gains are being capped with more mainland money flowing into Hong Kong through trading links. The CSI300 blue-chip index rose +0.4%, while the Shanghai Composite Index gained +0.3%.

In Europe, equity indices are trading mixed, as market participants remain nervous after the recent terror attack in London yesterday. Banking stocks are leaning on the Eurostoxx, while energy, commodity and mining stocks trade in the FTSE 100.

U.S stocks are set to open in the black (+0.2%).

Indices: Stoxx50 -0.1% at 3,420, FTSE flat at 7,322, DAX +0.2% at 11,925, CAC-40 -0.1% at 4,989, IBEX-35 +0.1% at 10,235, FTSE MIB +0.2% at 19,999, SMI +0.2% at 8,581, S&P 500 Futures +0.2%

2. Oil bounces off lows, but bloated U.S stocks pressure market

Oil prices have recovered a tad, but the market remains under pressure as bloated U.S crude inventories and rising output continues to dampen OPEC-led efforts to curb global production.

Brent crude futures at +$50.82 per barrel is up +18c, or +0.4% from Wednesday's close. Brent briefly dipped below the psychological +$50 intraday yesterday for the first time since November.

West Texas Intermediate (WTI) crude futures are up +19c, or +0.4% at +$48.23 a barrel, after testing support at +$47 overnight.

Note: The EIA said U.S inventories climbed almost +5m barrels to a record +533.1m last week, far outpacing estimates of a +2.8m barrel build. U.S production has risen over +8% since mid-2016.

There are signs that the Asian market is also bloated - China's gas imports are slumping and its own domestic refiners are exporting huge volumes overseas.

Gold prices slipped overnight, trading below its three-week high print yesterday, as the dollar recovers from its two-month low and markets wait to see if President Trump can push through his healthcare bill. The yellow metal is down -0.1% at +$1,247.30 per ounce - Wednesday, it touched its strongest since Feb. at +$1,251.26.

3. Global yields dependent on Trump stimulus expectations

With market risk sentiment being somewhat fragile given the uncertainty on whether Trump can deliver on stimulus expectations has been supporting U.S treasuries and bunds prices in particular

In the U.S, 10-year yields rose above +2.6% earlier this month and reached a two-year high as investors anticipated the Fed would raise short-term interest rates. They did last week, but its signal of a "gradual" path of tightening policy has debt product better bid. U.S 10's are trading at +2.41%. German bunds are trading just above +0.4%.

In the U.K, yields on 10-year gilts have backed up +1 bps to +1.19% after domestic data showed that U.K retail sales rose beating expectations (see below).

Elsewhere, the Reserve Bank of New Zealand (RBNZ) held rates steady overnight (+1.75%) as expected and maintains a neutral policy stance. In its policy statement, officials expressed more concern over housing inflation while reiterating that the exchange rate should depreciate more to achieve balanced growth.

4. Dollar waits for U.S House vote

Some of yesterday's risk aversion sentiment has eased overnight as the market awaits the U.S House vote on the repeal of Obamacare. A rejection of the bill could be interpreted that President Trump will have massive problems for his plans for tax cuts and spending increase and further undermine the Trump trade.

USD/JPY (¥111.00) has climbed away from its four-month low (¥110.75), but any further upside is facing resistance. Whispers of USD sell-stops below yesterday's lows may provide further momentum to test below the psychological ¥110.00 handle.

The Pound (£1.2520) has firmed on a better headline U.K retail sale for Feb. Sterling's focus will now be on Brexit divorce proceedings, which PM May, is expected to trigger on March 29.

5. U.K Retail Sales rebound in Feb

Data released this morning showed that U.K retail sales rebounded strongly in February (+1.4% vs. +0.4% e) following three consecutive months of decline, but the underlying trend remained weak, suggesting the industry was unlikely to make a positive contribution to growth in the Q1.

There were strong sales across all categories, with household goods stores out performing. However, sales in the three-months through Feb. fell by -1.4%, the fastest pace of decline in seven-years.

The pound's depreciation (£1.2520) since the Brexit vote is supporting price growth and with U.K wage growth struggles to keep up with inflation, the U.K consumer is expected to curb spending.

FTSE came under pressure again after pound rallied on Thursday and slipped from double upside rejection at 7270, where recovery attempts on Wednesday / today faced strong resistance.

Daily studies weakening and gaining bearish momentum, together with growing negative sentiment, keeps the downside in focus. Temporary footstep at 7225 (daily SMA) is under pressure and sustain break here would trigger further bearish acceleration towards next set of key supports at 7184/63 (Fibo 61.8% of 7024/7444 rally / top of rising daily cloud).

Alternative scenario requires break above 7270 as minimum to ease current bearish pressure, while acceleration through daily Kijun-sen / Tenkan-sen barriers at 7309/36 respectively is needed to neutralize and shift focus higher.

Res: 7270, 7309, 7336, 7367
Sup: 7225, 7184, 7158, 7123

News and Events:

RBNZ is willing to tolerate higher inflation for a weaker Kiwi

As widely expected, the Reserve Bank of New Zealand kept its Official Cash Rate target unchanged at a record low of 1.75. Also, Graeme Wheeler did not change his view on the overvaluation of the Kiwi, instead repeating the need for a weaker Kiwi 'to achieve more balanced growth'. He also allayed fears concerning rising inflationary pressure, arguing that the spike was temporary, stemming from a temporary rise in commodity prices.

Overall, the tone of the statement suggests that the RBNZ is ready to tolerate higher inflation in order to allow for a weaker Kiwi. This may be a good decision especially as core inflation has picked up at a slower pace than headline inflation. However, we are having a hard time believing that the market will collaborate. Indeed, the Kiwi has been one of the worst performing currencies among the commodity complex (+1.8% against the USD), especially against the Australian dollar (+6% versus the USD). We think that the Kiwi has room for further appreciation, especially against the Aussie. AUD/NZK has already fallen 1.6% since mid-March and is now heading towards the next key support area at between 1.08-07(psychological level and Fibo 38.2% on December-March rally).

SNB releases its annual report

In the latest annual report from the SNB, we have learned that the Swiss central bank bought around CHF67 billion in foreign currencies in order to defend the franc. Comparatively, this is lower than in 2015 when the floor was removed.

The SNB still sees the franc as 'significantly overvalued' and so the negative interest rate policy is more relevant than ever. However, for now, the central bank is sticking to its wait-and-see approach.

Europe's political uncertainties are weighing heavily on the EURCHF and we believe that bearish pressure shows no signs of easing. In terms of Swiss data, inflation has never been so high at 0.6% y/y and the unemployment rate remains moderate at 3.6%. Exports are a little more concerning with two consecutive declines in January and February (respectively -4% and -2.2%). In the short and medium-term, the Swiss Franc should remain below 1.0800 and the SNB is likely to intervene to avoid extreme strengthening. Finally, despite massive QEs, we believe that the ECB is likely to soon enter a tightening cycle – to reduce monetary policy divergence with the US - which in turn will definitely benefit the Swiss economy.

Obamacare repeal bill: Defeat or Delay?

Judging from the thin, directionless flows in Asia, investors will have to wait for the outcome of today’s vote on the Obamacare repeal bill for the market's next move. So far, the market has hyped this event as being a test of US President Trump's policy agenda, suggesting that a defeated healthcare bill would translate into barriers for the much-awaited tax reform policy and broader pro-growth agenda. As suggested in yesterday's report, we concur that short-term volatility will be driven by the result of this afternoon’s vote. With the Republican opposition needing less than 22 members to vote against the measure (reports suggest that 24 members are prepared to obstruct), we believe that the bill will be rejected (if the bill reaches the floor and is not delayed).

Interestingly, Republican conservatives are already shifting the blame away from President Trump to Speaker of the House, Paul Ryan. However, regardless of the outcome, Fed monetary policy will provide investors with a clear directional view. The weaker dollar has created looser conditions, while political uncertainty has forced investors to fade expectations due to the steeper Fed policy path (June hike is now 50/50). Amid falls in real yields and signs that the Fed will be willing to tolerate higher inflation to ensure growth is stable, risky asset should continue to outperform. Today, Fed Chair Yellen will provide additional insight into monetary policy strategy. We expect that she will reaffirm the central bank’s slow and steady approach to tightening, decelerating the economy without spooking financial conditions. Given this outlook, we maintain our stance that further risk accumulations will favour EM currencies (ZAR, ILS, PLN and INR long continue to build).

Today's Key Issues (time in GMT):

• Mar Consumer Confidence Indicator, exp 5, last 4,8 DKK / 08:00
• ECB's Nouy speaks in Brussels EUR / 08:00
• ECB Publishes Economic Bulletin EUR / 09:00
• BOE Deputy Governor Ben Broadbent Speaks in London GBP / 09:00
• Feb Retail Sales Ex Auto Fuel MoM, exp 0,30%, last -0,20%, rev -0,30% GBP / 09:30
• Feb Retail Sales Ex Auto Fuel YoY, exp 3,20%, last 2,60%, rev 2,10% GBP / 09:30
• Feb Retail Sales Inc Auto Fuel MoM, exp 0,40%, last -0,30%, rev -0,50% GBP / 09:30
• Feb Retail Sales Inc Auto Fuel YoY, exp 2,60%, last 1,50%, rev 1,00% GBP / 09:30
• mars.23 ECB Targeted LTRO Total Amount, exp EU110.00b, last EU62.16b EUR / 10:20
• mars.22 FGV CPI IPC-S, exp 0,38%, last 0,35% BRL / 11:00
• Mar CBI Retailing Reported Sales, exp 4, last 9 GBP / 11:00
• Mar CBI Total Dist. Reported Sales, exp 20, last 25 GBP / 11:00
• mars.17 Foreigners Net Bond Invest, last $354m TRY / 11:30
• mars.17 Foreigners Net Stock Invest, last -$94m TRY / 11:30
• Revisions: Initial Jobless Claims USD / 12:30
• mars.18 Initial Jobless Claims, exp 240k, last 241k USD / 12:30
• mars.11 Continuing Claims, exp 2040k, last 2030k USD / 12:30
• Fed's Yellen Speaks at Community Development Conference USD / 12:45
• mars.17 Gold and Forex Reserve, last 391.4b RUB / 13:00
• mars.19 Bloomberg Consumer Comfort, last 51 USD / 13:45
• Feb New Home Sales, exp 564k, last 555k USD / 14:00
• Feb New Home Sales MoM, exp 1,60%, last 3,70% USD / 14:00
• ECB's Lautenschlaeger Speaks at Vienna Conference EUR / 14:45
• Mar Kansas City Fed Manf. Activity, exp 14, last 14 USD / 15:00
• Mar A Consumer Confidence, exp -5,9, last -6,2 EUR / 15:00
• Fed's Kashkari Speaks on U.S. Education Outcomes in D.C. USD / 17:00
• SNB's Maechler Speaks in Zurich CHF / 17:00
• Mar Consumer Confidence, last 94,4 KRW / 21:00
• Feb Trade Balance NZD, exp 180m, last -285m NZD / 21:45
• Feb Exports NZD, exp 4.20b, last 3.91b NZD / 21:45
• Feb Imports NZD, exp 3.99b, last 4.19b NZD / 21:45
• Feb Trade Balance 12 Mth YTD NZD, exp -3655m, last -3468m NZD / 21:45
• 4Q BoP Current Account Balance, exp -$12.00b, last -$3.40b INR / 22:00

The Risk Today:

EUR/USD keeps on pushing higher, even though the pair is now pausing around 1.0800. A break of the upside channel would signal persistent buying pressures. Key resistance is given at a distance 1.0874 (08/12/2017 high). Strong support can be found at 1.0493 (22/02/2017 low). The technical structure suggests deeper increase towards resistance at 1.0874. In the longer term, the death cross late October indicated a further bearish bias. The pair has broken key support given at 1.0458 (16/03/2015 low). Key resistance holds at 1.1714 (24/08/2015 high). Expected to head towards parity.

GBP/USD has broken bearish downtrend channel. The pair has broken resistance at 1.2429 and there are rooms for further strength. Hourly resistance is located at 1.2570 (24/02/2017 high). Hourly support is given at 1.2324 (03/17/2017 low). The long-term technical pattern is even more negative since the Brexit vote has paved the way for further decline. Long-term support given at 1.0520 (01/03/85) represents a decent target. Long-term resistance is given at 1.5018 (24/06/2015) and would indicate a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

USD/JPY has failed to break key resistance given at 115.62 (19/01/2016 high) confirming persistent selling pressures. The pair has broken strong support at 111.36 (28/11/2016 low). Hourly resistance can be located at 113.57 (16/03/2017 high). We favor a long-term bearish bias. Support is now given at 96.57 (10/08/2013 low). A gradual rise towards the major resistance at 135.15 (01/02/2002 high) seems absolutely unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

USD/CHF is declining. Hourly support is given at 0.9862 (31/01/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show continued weakness. In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

UK retail sales handily exceeds estimates; focus on upcoming US House on on Obamacare repeal

Notes/Observations

Markets await for the outcome of the vote on repeal of Obamacare (expected late Thursday); Republican leaders need time to gather votes

UK Feb Retail sales handily beat expectations while back month revised slightly lower

Overnight:

Asia:

New Zealand Central Bank (RBNZ) leaves Benchmark Rate unchanged at record low; signaled no rush to tighten highlighting external uncertainties

US preparing cases linking North Korea to cyber theft at the NY Fed (regarding $81M in thefts)

Europe:-

Metropolitan Polices Dep Commissioner: London attack "inspired by international Islamist terrorism" results in 5 deaths and 40 injured; PM May vowed that Parliament will open as usual on Thursday

German Feb Finance Ministry monthly report: Incoming data suggesting continuation of economic upturn

Americas:

Trump administration reportedly considering making last minute changes to House healthcare bill to appease Freedom Caucus (reducing some of the "essential benefit" requirements of Obamacare)

Economic Data

(DE) Germany Apr GfK Consumer Confidence (miss): 9.8 v 10.0e

(TR) Turkey Mar Consumer Confidence: 67.8 v 65.6e

(FR) France Mar Business Confidence: 104 v 104e; Manufacturing Confidence: 104 v 107e

(DK) Denmark Mar Consumer Confidence Index: 6.2 v 5.0e

(TW) Taiwan Feb Industrial Production Y/Y: 10.6% v 10.0%e

(PH) Philippines Central Bank (BSP) left its Overnight Borrowing Rate unchanged at 3.00% (as expected)

(TW) Taiwan Central Bank (CBC) left ist Benchmark Interest Rate unchanged at 1.375% (as expected)

(UK) Feb Retail Sales (Ex-Auto Fuel) M/M: 1.3% v 0.3%e; Y/Y: 4.1% v 3.2%e

(UK) Feb Retail Sales (Including Auto/Fuel) M/M: 1.4% v 0.4%e; Y/Y: 3.7% v 2.6%e

Fixed Income Issuance:

None seen

SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM

Index snapshot (as of 09:30 GMT)

Indices [Stoxx50 -0.1% at 3,420, FTSE flat at 7,322, DAX +0.2% at 11,925, CAC-40 -0.1% at 4,989, IBEX-35 +0.1% at 10,235, FTSE MIB +0.2% at 19,999, SMI +0.2% at 8,581, S&P 500 Futures +0.2%]

Market Focal Points/Key Themes: European equity indices are trading mixed across the board as market participants remain jittery after the recent terror attack in London yesterday; Banking stocks mixed but generally lower across the board at the time of writing; shares of Next the notable gainer in the FTSE 100 after releasing its FY16 results, with consumer discretionary stocks Marks & Spencer, Dixons Carphone, and Tesco also notably higher in the index; Energy, commodity and mining stocks mixed as copper and oil prices trade flat intraday.

Upcoming scheduled US earnings (pre-market) include Accenture, ConAgra Foods, Commercial Metals, Hanwha Q Cells, and Scholastic Corp.

Equities (as of 09:25 GMT)

Consumer Discretionary: [Hornbach Holding HBH3.DE -0.5% (prelim FY16/17 results), Intelligent Energy IEH.UK +126% (deal signed to deliver fuel cell systems), Next PLC NXT.UK +8.1% (FY16 results), Ted Baker TED.UK -5.1% (FY16 results)]

Financials: [Baloise Holding BALN.CH +0.4% (FY16 results, div increase), Crest Nicholson CRST.UK -0.5% (AGM statement), Wendel MF.FR +4.0% (FY16 results), Vienna Insurance VIGR.AT +2.8% (FY16 results, raises div)]

Healthcare: [Ion Beam IBAB.BE +2.7% (FY16 results), UCB UCB.BE +0.9% (USPTO confirms the validity of U.S. patent 38,551)]

Industrials: [Kier Group KIE.UK +0.7% (H1 results, names Chairman designate, launches JV with Cross Key Homes), Leoni LEO.DE +5.3% (FY17 outlook), WYG WYG.UK -18.8% (trading update, cuts outlook)]

Materials: [Metall Zug METN.CH -0.5% (FY16 results, div increase)]

Technology: [United Internet UTDI.DE +0.3% (FY16 results, div increase)]

Speakers

ECB Publishes Economic Bulletin reiterated its March monetary policy stance that a very substantial degree of monetary accommodation was still needed to support headline inflation in the medium term. Governing Council to continue to look through changes in HICP inflation if judged to be transient. Conditions necessary to secure a sustained convergence of inflation rates towards levels below, but close to, 2%.

ECB Single Supervisory Mechanism Annual Report with ECB's Draghi noting that low bank profitability weakened the support to the recovery

ECB's Nouy (SSM Chief) noted that it would be most welcome' if global regulatory reform was finalized as planned. Finance transcends national borders and so must the rule that govern it

ECB raised its emergency liquidity assistance (ELA) cap for Greece banks from €46.2B to €46.6B (1st hike since Jun 2015)

Spain Fin Min de Guindos reiterated govt view that 2017 GDP growth target of 2.5% and would update its forecast for unemployment

German Finance Ministry comments on Q2 issuance: To sell €44B in bills and bonds in quarter

Scotland Referendum vote said to be delayed to Tuesday, Mar 28th (Note: Debate was suspended on Wed, Mar 22nd due to the terror-related incidence near London's Westminster)

Philippines Central Bank Policy Statement reiterated that its current policy settings remained appropriate and that inflation to remain within the target range for both 2017 and 2018. It noted that ; the latest CPI forecast were slightly lower than prior view with risks tilted to the upside

Taiwan Central Bank Policy Statement noted that inflation was mild and the output gap remained negative, TWD currency (NT$ dollar) gains helping to ease imported inflation. Fiscal expansion was needed for economy

Japan Cabinet Office (Govt) Monthly Report maintained its overall assessment that domestic economy was continuing a moderate recovery although with a delay in some areas. Raised its views on retail consumption and corporate earnings

Malaysia Central Bank saw 2017 GDP growth seen between 4.3-4.8% range. Monetary policy to focus on supporting sustainable growth for economy and maintaining price stability and to introduce new measures to help small businesses to hedge their exposure against MYR currency (Ringgit) volatility

Currencies

Some of the risk aversion sentiment from Wednesday dissipated but market awaits the US House vote on the repeal of Obamacare.A r ejection of the bill could deliver potential setbacks to President Trump plans for tax cuts and spending increase thus undermining the rally in risk assets.

The USD/JPY pair climbed back above the key 111 support area but upside did face some headwinds for now. USD sell-stops said to be placed below the 110.70 area and could open the door for more retracement of the post Trump election rally with 105 seen as the next key level on any sustained one-way price move.

The GBP/USD firmed in the aftermath of better headline UK retails data for Feb. GBP/USD rose over 40 pips to test 1.2525 while EUR/GBP cross probed the 0.8600 area. UK 10-Gilt yield was higher and briwfly tested above 1.19%

Fixed Income:

Bund futures trade at 160.33 up 13 ticks with peripheral bonds outperforming, as futures consolidate above 160.00. Resistance remains near session highs at 160.45 followed by 160.66. Support moves to 159.96 followed by 159.41 then contract low of 158.73.

Gilt futures trade at 126.78 down 16 ticks trading lower on the back of stronger Feb retail sales figures out of the UK, fading some of the sharp move higher seen yesterday. Support moves to 126.34 followed by 126.07 then 125.80. Resistance moves to 127.35 followed by 127.89. Short Sterling futures trade down 1 to 2bp with Jun17Jun18 spread widening to 22/22.5Bp.

Thursday's liquidity report showed Wednesday's excess liquidity rose to €1.329B a rise of €7B from €1.322T prior. Use of the marginal lending facility rise to €232M from €117M prior.

Corporate issuance saw six issuers announce deals yesterday including Goldman Sachs, Ventas Realty, and Santander USA. Volume is expected be quiet for the rest of the week with weekly volume expected to be the lowest in the past 4 weeks, and towards the low end of this weeks $20-30B forecast.

Looking Ahead

(UR) Ukraine Feb Industrial Production M/M: No est v -17.5% prior; Y/Y: 2.5%e v 5.6% prior

(CO) Colombia Feb Industrial Confidence: No est v 1.9 prior; Retail Confidence: No est v 24.8 prior

(AR) Argentina Mar Consumer Confidence Index: No est v 40.7 prior

06:00 (EU) Daily Euribor Fixing - 06:00 (RO) Romania to sell Bills

06:30 (EU) ECB allotment in TLTRO-2 operation

06:30 (HU) Hungary Debt Agency (AKK) to sell 12-month Bills

06:30 (HU) Hungary Debt Agency (AKK) to sell Floating Rate bonds

06:30 (PL) Poland to sell 2019, 2022, 2026 and 2027 bonds (5 tranches)

07:00 (UK) Mar CBI Retailing Reported Sales: 4e v 9 prior, Total Distribution: 20e v 25 prior

07:00 (IL) Israel Feb Unemployment Rate: No est v 4.3% prior

07:45 (US) Daily Libor Fixing

08:00 (US) Fed Chair Yellen speaks at Community Development Conference

08:30 (US) Initial Jobless Claims: 240Ke v 241K prior; Continuing Claims: 2.04Me v 2.030M prior

08:30 (US) Weekly USDA Net Export Sales

09:00 (PL) Poland Central Bank (NBP) Mar Minutes

09:00 (RU) Russia Gold and Forex Reserve w/e Mar 17th: No est v $391.4B prior

09:15 (UK) Baltic Dry Bulk Index

10:00 (US) Feb New Home Sales: 565Ke v 555K prior

10:00 (BE) Belgium Mar Business Confidence: -0.5e v -1.1 prior

10:30 (US) Weekly EIA Natural Gas Inventories

11:00 (US) Mar Kansas City Fed Manufacturing Activity: 14e v 14 prior

11:00 (EU) Euro Zone Mar Advance Consumer Confidence: -5.9e v -6.2 prior

11:00 (BR) Brazil to sell 2023 LFT - 03/01/2023

11:00 (BR) Brazil to sell 2018, 2019 and 2020 LTN Bills

12:30 (US) Fed's Kashkari (dove, dissenter) on education in DC

13:00 (CH) SNB's Maechler speaks in Zurich

13:00 (US) Treasury to selll 10-Year TIPS Reopening

14:00 (US) Fed's Kashkari (Dove, dissenter) speaks at Community Development Event

19:00 (US) Fed's Kaplan (moderate, voter) speaks on economy in Chicago

19:00 (US) House of Representatives vote on Healthcare Bill (Thursday evening)

GOLD Ready to push higher.

Gold has risen sharply, nearly invalidating the bearish short-term outlook. The momentum seems back to bullish. Key resistance is located at 1263 (27/02/2017 high). Hourly support can be found at 1224.10 (16/03/2017 low). Expected to show further strengthening.

In the long-term, the technical structure suggests that there is a growing upside momentum. A break of 1392 (17/03/2014) is necessary ton confirm it, A major support can be found at 1045 (05/02/2010 low).

SILVER Increasing demand.

Silver rose sharply Friday, invalidating the bearish outlook linked to the previous bearish pause. Correct pullback has failed to find seller indicating test of 17.56 resistance (16/03/2017 high). Strong support is given at 16.84 (27/01/2016 low).

In the long-term, the death cross indicates that further downsides are very likely. Resistance is located at 25.11 (28/08/2013 high). Strong support can be found at 11.75 (20/04/2009).

Crude Oil Heading downwards.

Crude oil's bearish pressures continues despite correct bounce due to a short-squeeze. The commodity had been unable to mount a serious challenge to resistance at 49.61 (08/12/2017 low) hourly support given at 47.09 (016/03/2017 low) Expected to see deeper selling pressures.

In the long-term, crude oil has recovered after its sharp decline last year. However, we consider that further weakness are very likely. Strong support lies at 24.82 (13/11/2002) while resistance can now be found at 55.24 (03/01/2017 high).

EUR/CHF Moving sideways.

EUR/CHF's is moving up and down. The medium-term pattern suggests us to see continued bearish pressures towards key support that can be found at 1.0623 (24/06/2016 low).

In the longer term, the technical structure is mixed. Resistance can be found at 1.1200 (04/02/2015 high). Yet,the ECB's QE programme is likely to cause persistent selling pressures on the euro, which should weigh on EUR/CHF. Supports can be found at 1.0184 (28/01/2015 low) and 1.0082 (27/01/2015 low).

EUR/JPY Strong bearish pressures.

EUR/JPY rejection at 122.88 has triggered a correction. The pair is also very volatile. Hourly support at 120.55 (17/01/2017 low) has been broken. Another support at 120.02 (08/03/2017 low) has been broken. Resistance stands at 122.88 (13/03/0217 high). Expected to show continued weakness.

In the longer term, the technical structure validates a medium-term succession of lower highs and lower lows. As a result, the resistance at 149.78 (08/12/2014 high) has likely marked the end of the rise that started in July 2012. Strong support at 94.12 (24/07/2012 low) looks nonetheless far away.

EUR/GBP Continued weakness but...

EUR/GBP is correcting lower. Yet there is the formation of a bullish flag which suggests reversal of current weakness targeting 0.9000. Key resistance is given at 0.8854 (15/01/2017 high) and other resistance can be found at 0.8787 (13/03/20167 high). Support is located at 0.8645( 05/02/2017 low).

In the long-term, the pair has largely recovered from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is trading above from its 200 DMA. Strong resistance can be found at 0.9500 psychological level.

USD/CHF Weakening.

USD/CHF is declining. Hourly support is given at 0.9862 (31/01/2017 low). Key resistance can be found at a distance at 1.0344 (15/12/2016 high). Expected to show continued weakness.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/CAD Stalling below 1.3400.

USD/CAD is bouncing. However a break of resistance area around 1.3400 is needed to invalidate the current short term bearish technical structure. The road seems still wideopen for larger decline. Key support is given at 1.2969 (31/01/2017 low).

In the longer term, there is a golden cross with the 50 dma crossing the 200 dma indicating further upside pressures. Strong resistance is given at 1.4690 (22/01/2016 high). Long-term support can be found at 1.2461 (16/03/2015 low)

AUD/USD Stalling within strong resistance area.

AUD/USD has failed to test the key resistance at 0.7778 (08/11/2016 high). Hourly support at 0.7664 (16/03/2017 low) has been broken. Expected to see some short-term weakness.

In the long-term, we are waiting for further signs that the current downtrend is ending. Key supports stand at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8295 (15/01/2015 high) is needed to invalidate our long-term bearish view.