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ALL:  Ears will be turned towards Washington where many leaders are gathering for the IMF and G20 meetings over the coming days and weekend.   The market will be sensitive to fresh comments or view on the latest developments on the yen, but we don’t expect much in the way of raised tensions on this front. See G-20 infographic.

GBP: The retail sales numbers at 08:30 GMT round off a busy week for UK data.   The February numbers were firm, with headline sales rising 1.9% MoM so March is expected to give some of that weakness back (expected 0.6% decline).   If we do see a stronger than expected number, then sterling will benefit on the basis that this is one of the last of the data releases before the Q1 GDP estimate is released next week.

Idea of the Day

The coming days sees lots of gatherings in Washington including G20 leaders.   A draft of the statement being carried on Bloomberg suggests that their language on currencies is little changed from the sentiments seen in February.   Back then, there were concerns that Japan would come in for criticism for its policies and their impact on the yen.

This did not come to fruition, but we have seen less direct commentary from Japanese officials on the currency since that time.   As we mentioned yesterday, after the initial flurry surrounding the Japan’s announcements earlier this month, we may need to see some data moving the Bank of Japan’s way before we see a sustained moved above 100 on USDJPY.   The overnight data (showing Japanese investors were still sellers of overseas bonds) was not supportive for yen bears.

Latest FX News

JPY: A modest improvement in the trade balance overnight, although still recording a deficit of JPY 362bln. The weekly data for foreign bond purchases still showed net sales, but as we said last week it will likely be a few weeks before true underlying trend emerges (expectation of purchases from Japanese investors).   JPY stable overnight near to the 98.00 level on USDJPY.

Gold:  The market remains bruised from the recent sell-off and few signs that investors are jumping in at these lower levels below $1,400.

EUR: Weaker towards the end of Wednesday on comments from ECB member Weidmann, who suggested that scope for rate cuts remained “if new information warranted” and remained bearish on the longer-term outlook, which in itself is not a revelation at all. Very steady overnight tight to the 1.3050 level.