FX News Today

JPY Remains Centre Stage: The surging yen continued yesterday and into the US open before giving up some of its strong gains over night, but the momentum and sentiment is clearly still with the YEN. The USDJPY traded to a low of 107.82 a figure not seen since October 2014 (just before the BOJ increased its QE programme substantially). EURJPY fell to a low of 122.56 and the GBPJPY 151.89. There were public pronouncements from Chief Cabinet Secretary Yoshihide Suga again yesterday that “We’re watching the foreign exchange market with a sense of tension,” adding that “the government believes excessive and disorderly movements in the exchange rate have a negative effect.”. However, with Japan hosting the next G7 meeting next month it’s unlikely (but far from certain) that the BOJ will intervene to weaken the surging currency. Only time will tell.

German trade surplus widens as export growth picks up. Germany posted a  (sa) trade surplus of EUR 19.7 bln in February, up from EUR 18.7 bln in January, with exports rebounding 1.3% m/m, after the -0.8% m/m drop at the start of the year. Import growth meanwhile moderated to 0.4% m/m from 1.3% m/m. Accumulated data for the three months to January still show a decline in the three months trend, which confirms that the overall economy cannot rely on net exports to generate growth, as global headwinds get stronger. Unadjusted data show a slight widening of the current account surplus in the first two months of the year, compared to 2015, but the trade surplus is narrowing.

European Outlook: Asian stock markets were mixed overnight. Japanese markets improved as the Yen finally eased. Oil prices moved higher with the front end Nymex futures now slightly above USD 38 per barrel. US and UK stock futures are also posting gains, and risk appetite seems to be returning. ECB officials left the door to further easing measures wide open yesterday, even if they try to squash speculation of Helicopter money. Fed Chair Yellen also repeated that she sees some remaining slack in the labour market, although hawk George warned against delaying further hikes. In the Eurozone the flaring up of Grexit fears is pushing out yield spreads once again and causing further headache for Draghi. There is more ECBspeak on the calendar from Nowotny and Mersch today. UK publish trade data and there are also production figures from the U.K. and France alongside Swiss inflation numbers.

Draghi Speech, No change:  ECB doesn’t have shortage of available tools. The ECB President said the March 10 measures will further support price stability and help maintain the trust in the currency. At the same time, he stressed once again that all actors need to play a role in the recovery of the Eurozone and that fiscal rules shouldn’t be stretched beyond credibility. He also said that there is no case for unraveling past reforms in Europe. Nothing really new there, although with the ECB reducing market pressure on governments to implement and stick with reforms, the central bank’s calls on governments have so far had little impact.

 

Main Macro Events Today

• UK Industrial Production  

UK Industrial production is expected to slow 0.1% m/m from 0.3% m/m. Showing continued shrinking for UK factory output, even with a depreciating GBP demand particularly form Eurozone countries remains very weak. More evidence of a tough first quarter and sluggish global demand.

• Canadian Unemployment

The March employment report is expected to show a pick up in jobs to 10.4k but the unemployment rate to remain steady and unchanged at 7.3%.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

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Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

BOJ Koruda and Japan Finance Ministry: A reiteration of the Japanese economic approach was emphasized overnight as both the BOJ Governor and the finance ministry chief (Mr Suga) pledged more of the same and that they “Will take steps in FX market if needed”. The YEN continued its surge against its major competitors USDJPY is current trading at 108.8, EURJPY 124.50 and GBPJPY 154.00. The Nikkei 225 was understandably subdued on the news and is currently the lagging Asian stock market.

European Outlook: The bounce back in oil prices, which have risen above USD 38 per barrel, is keeping equity markets underpinned and things continued to improve in Asia overnight, with most markets outside of mainland China in positive territory, although gains have been modest, compared to the rise in the U.S. and the U.K. The Fed minutes, which on balance favoured caution added support, while the rise in the Yen is keeping a lid on Japanese equities. U.K. stock futures are also higher, pointing to opening gains in Europe, with Eurozone markets likely to continue to underperform amid ongoing EUR strength and concerns about the economic and political outlook for the Eurozone as Grexit fears flare up again and push out spreads. The calendar is relatively quiet, with a focus on the ECB, which publishes the minutes to the March meeting and holds a conference on “The ECB and its watchers”.

FOMC minutes: They showed “several” officials argued for a cautious approach regarding the potential for an April hike, which was debated at the March meeting. As Yellen commented in her recent speech, and in her press conference, many participants thought the current rate asymmetry made it prudent to wait for more information on the underlying strength of economic activity or inflation before taking another step to reduce accommodation. The minutes revealed global concerns remained very relevant — the word “global” was used 13 times in the participants’ discussion of current conditions (“risks,” or some variation, appeared 16 times). Again the FOMC reiterated the next move would be data, not calendar, dependent. We’re not seeing anything really new in the minutes versus what we knew from the policy statement, the SEP, and subsequent Fedspeak.

Fedspeak, Positions Confirmed: Fed hawk Mester expects “gradual” rate hikes this year in a repeat of previous missives on the topic, in discussing the economy and monetary policy from Cleveland. Bullard also stated his expectation that inflation will overshoot the 2% target and that 2.2% inflation is better than 1.5% inflation and that all meetings are “live”. So more of the same from the Presidents.

 

Main Macro Events Today

• ECB’s Draghi Speech   

Due to speak about the economic and financial situation in Europe at the Portuguese President’s Council, in Lisbon. The eloquent and reserved Mr Draghi is always one to listen too carefully. Portuguese Bonds were dragged down yesterday along with Grexit talk. Interesting location for his latest speech.

• Fed’s Yellen Speech   

In New York the four latest Chairs (Volcker, Greenspan, Bernanke and Yellen) of the FOMC are meeting and Mrs Yellen is due to speak. As the incumbent Chair she is unlikely to use the occasion to utter anything new or indeed controversial. The words from her predecessors on the other hand could prove more interesting.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

FX News Today

German Feb industrial production drops less than feared: Production correcting just 0.5% m/m from the rise in January, against expectations for a drop of around -2.0% m/m. Still, the January number was revised sharply down to 2.3% m/m from 3.3% m/m reported initially and the annual rate fell back in February. Together with the weaker than expected orders readings and mixed confidence data the outlook is for slowing growth in overall production and a general weakening of the growth trajectory as the improvement on the labour market peters out and the refugee crisis weighs on consumer confidence.

European Outlook: Asian stock markets were mixed with Japan underperforming as a third consecutive dip in the leading indicator and a stronger Yen weighed on markets. Elsewhere stock markets started to stabilize and the front end Nymex futures climbed toward USD 37 per barrel. The EUR weakened, but remains clearly above 1.130 against the dollar. Released overnight the U.K. BRC shop price index dropped -1.7% in March, a slight uptick from the -2.0% y/y in February. Still to come, there is central bank speak from the ECB and the Riksbank and Germany, Denmark, Sweden and Norway sell bonds, while Greece issues bills amid fresh Grexit concerns.

US ISM-NMI March increased to 54.5: This was from a 53.4 two-year low that beat estimates and capped a four-month drop from a solid 58.3 as recently as October, versus a 59.6 ten-year high last July. The ISM-adjusted measure rose to 54.1 from 53.2 in February and a 53.1 two-year low in January, versus a 59.0 ten-year high last July. The ISM-NMI figures remain stronger than the factory sentiment readings likely because the service sector is benefiting from the boost to household purchasing power via lower gasoline prices, while the factory sector faces headwinds from an inventory overhang, weak foreign demand, restraint in the vehicle assembly rate, and a petro-sector recession. Given March strength in the factory sentiment figures, the ISM-adjusted average of the major surveys popped to a surprisingly solid 53 in March from 49 in both January and February and 50 over the last four months of 2015, leaving the strongest average since the 53 figure in June and July of last year.

US JOLTS report showed job openings fell 159k: 5,445k openings in February versus a revised 323k January gain to 5,604k (was 5,541k), though the January level was the 3rd highest of this cycle. The rate fell to 3.7% from 3.8%. Hiring rebounded 297k to 5,422k after diving 276k in January to 5,125k (revised from 5,029k). The rate rose to 3.8% versus 3.6% previously. Quitters increased 99k to 2,950k following the prior 237k decline to 2,851k (revised from 2,804k). The quit rate also rose to 2.1% from 2.0%.

 

Main Macro Events Today

• FOMC Minutes  

The minutes to the March 17, 18 Fed meeting will be interesting for clues on the various outlooks of the Committee. However, Yellen’s dovish stance has usurped a lot of the importance of the minutes. Also, other Fedspeakers since the mid-March meeting have also let their feelings known, with even the more dovish members supporting expectations for 2 rate hikes this year. Meanwhile, data has revealed a slower Q1 economy, with our 2016 growth forecast now just 0.7%, with the Atlanta Fed at 0.4%. We know that in March, policymakers were contending with many uncertain and conflicting signals, as well as geopolitical concerns. Those factors left the FOMC on the sidelines, as they punted into Q2, although the economic projections for the year, along with inflation forecasts, were trimmed. Look for the minutes to largely underscore the various uncertainties domestically and around the world as the central reason for the unchanged policy stance.

• ECB Non-Monetary Policy Meeting   

The Non-Monetary policy’s ECB meeting is this morning in Frankfurt. This is a monthly meeting and involves all 25 members of the governing council.

Janne Muta

Chief Market Analyst

If you wish to get the latest forex brokers news,you can visit our Top Forex Brokers official website:

http://www.topforexbrokerscomparison.com

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.