The US Treasury yields across the curve witnessed a fresh round of selling that suggested mounting global economic fears and triggered a renewed risk-aversion wave across Asia. The US dollar stalled its broad-based bullish streak and was dragged lower by the sell-off in Treasury yields. Meanwhile, the safe-haven Yen rallied hard against its American peer, knocking-off USD/JPY closer towards the 110 handle. The Antipodeans managed to stage a comeback following the early dip, with the Aussie back at the 0.71 handle while the Kiwi extends the post-RBNZ recovery and rose +0.40% to near 0.6825 levels. Both the EUR and the pound bounced off lows, helped by the renewed weakness around the greenback, but further upside looks dicey amid ongoing political uncertainty.
Among the related markets, the Asian stock markets trade mixed with caution, with the Japanese equities the main laggard. Both crude benchmarks dropped amid a surprise US inventory build and reduced risk appetite while gold futures on Comex recovered to 1317 region.
Main Topics in Asia
Brexit Updates
UK Lawmakers voted and still no majority for Brexit options (GBP lower)
UK Tory lawmaker Jacob Rees-Mogg: If Prime Minister May’s Brexit deal is brought to a vote he’d support the DUP
UK’s Letwin: Parliament will reconsider options on Monday
Other Headlines
NZ: Business confidence fell back again in March – Westpac
Fed’s George says Fed did not make a mistake to raise rates in Sept 2018
Gold Technical Analysis: On the defensive at $1,310 after inside day bearish reversal
Trump interview on Fox: Mueller investigation was a disgrace – ‘It was treason’
Australia’s 3-year bond yield hits record low
US official: US and China have made progress on trade talks but sticking points remain
China Premier Li: China advocates free, fair trade
China Premier Li: China won’t use massive stimulus, will take steps if needed
Oil under pressure after unexpected US inventory build
US 10-year treasury yield hits 15-month low
Key Focus Ahead
The main focus today remains the US Q4 final GDP report and German March prelim CPI release due at 1230 GMT and 1300 GMT while the risk-off/on continue to play a pivotal role across the financial markets so far this Thursday.
Meanwhile, we have a slew of confidence from the Euroland due to be reported at 1000 GMT while the UK docket remains data-empty. Traders look forward to fresh Brexit-related updates for further directives on the GBP after the UK Parliament rejected all the eight Brexit options overnight.
Apart from the US growth numbers, markets also await the US weekly jobless claims (at 1230 GMT) and pending home sales release due at 1400 GMT amid a bevy of FOMC members scheduled to make their respective speeches.
The list of the central bankers’ speeches scheduled in the day ahead is hereunder:
1115 GMT – Fed’s Quarles
1330 GMT – Fed’s Clarida
1700 GMT – SNB’s Maechler
1715 GMT – Fed’s Williams
2120 GMT – Fed’s Bullard
EUR/USD sell-off stalls near 76.4% Fib ahead of German CPI; US GDP unlikely to provide any surprise
The Euro sellers have likely run out of steam near 1.1240 (76.4% Fib R of 1.1176/1.1448) and with the hourly relative strength index (RSI) creating higher lows, the shared currency could see a corrective bounce ahead of the German inflation data.
GBP/USD: Further developments on Brexit, US-China trade deal awaited amid recent recovery
While recent market moves highlight the importance of the reports from Beijing, the UK PM May also needs to struggle for gaining enough support for her Brexit deal if she is ready to face another vote on Friday.
USD/INR Technical Analysis: Awaiting range breakout
The eight-day long narrowing price range seen in USD/INR’s 4-hour chart could be breached to the higher side, as the widely-followed 5- and 10-day moving averages (MAs) have produced a bullish crossover.
US Fourth Quarter GDP Final Revision: No surprise for you
The Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce will issue its second revision of annualized 4th quarter GDP on Thursday, March 28th at 8:30 am EDT, 12:30 GMT. Economic growth forecast for 2018 is expected to be above 3% for the first time since 2006.
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