Articles
Asian Stock Market: Central bankers, China probe bulls as yields swirl higher
March 30, 2023 12:33 FXStreet Market News
- Asia-Pacific stocks drift lower as markets reassess inflation, banking concerns.
- Major central bankers defend rate hikes despite highlighting data dependency.
- China’s Premier appears hopeful of higher growth but gives air to Sino-American tension.
- IMF cites need for urgent debt support system; Japan braces for higher wages.
Asian equities remain depressed even as Australia, New Zealand and South Korea print gains during early Thursday. That said, the stock markets in China and Japan print losses and hence highlight overall mildly negative sentiment for the traders.
While portraying the mood, the MSCI’s Index of Asia-Pacific shares outside Japan drops 0.30% whereas Japan’s Nikkei 225 prints 0.80% intraday loss near 27,650 even as Japanese Prime Minister Fumio Kishida braces for higher wages. The reason for pessimism in Tokyo could be linked to the likely negative impact of higher salaries on inflation and the Bank of Japan’s (BoJ) easy money policy.
Elsewhere, stocks in China grind lower as Premier Li Qiang recently said that the economic situation in March is even better than in January and February. The policymaker, however, also raised geopolitical tension by opposing trade protectionism and decoupling, which indirectly targets the US.
It should be noted, however, that dovish concerns about the Reserve Bank of Australia (RBA) and mixed statistics in New Zealand allow equity bulls in Canberra and Auckland to remain hopeful despite seeing losses elsewhere. On the same line is South Korea’s KOSPI as BOK Manufacturing BSI improved in March.
Alternatively, Indian markets are off due to Ram Navmi while Indonesia’s IDX Composite takes clues from Chinese stocks to print mild losses.
On a broader front, Fed Chair Jerome Powell’s teasing of one more rate hike joined Fed Vice Chair for Supervision Michael Barr’s emphasis on data dependency to allow the US Dollar to remain firmer. On the same line could be Fed Chair Powell’s push for alteration in deposit insurance. As a result, the Fed hawks do flex their muscles but wait for more clues and amplify the market’s anxiety ahead of Friday’s key inflation gauge from the US, namely the Core Personal Consumption Expenditure (PCE) Price Index.
Furthermore, International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said on Thursday, “Urgently need faster, more efficient mechanisms for providing debt support to vulnerable countries.” Her comments renew banking fears which eased previously.
As a result, the S&P 500 Futures struggled around a one-week high marked the previous day, while ignoring Wall Street’s upbeat performance, whereas the US 10-year and two-year Treasury bond yields grind higher after teasing the bond buyers the previous day.
Looking ahead, preliminary readings of the Harmonized Index of Consumer Prices (HICP) gauge for Germany will precede the US fourth quarter (Q4) Core Personal Consumption Expenditure (PCE) and final prints of the US Q4 Gross Domestic Product (GDP) to entertain traders.
Full ArticleGold Price Forecast: XAU/USD at a critical juncture ahead of key inflation data
March 30, 2023 12:33 FXStreet Market News
- Gold price remains on the back foot as US Dollar keeps up its recovery mode.
- US Treasury bond yields trade listlessly as traders reprice Federal Reserve policy odds.
- Thursday’s euro area inflation data and Friday’s United States PCE Price Index are in focus.
- Gold bears need a daily close below $1,953 to validate a pennant breakdown.
Gold price is looking to extend the previous weakness while defending the $1,950 level so far this Thursday. The extended rebound in the United States Dollar (USD) is boding ill for the Gold price, as investors turn their attention toward incoming United States economic data due in the second half of this week.
US Dollar shows signs of life, Gold price stays on the back foot
Gold price has been trading choppy in a familiar range so far this week, holding the corrective downside amid a broad-based US Dollar comeback, despite improving market mood. The US tech-heavy Nasdaq entered a bull market, having posted 20% gains so far this year, lifting the overall sentiment in the US last session.
Meanwhile, the odds of a 25 basis points (bps) US Federal Reserve rate hike for May seem to be gradually increasing, now at 49%, per the CMEGroup’s FedWatch Tool. Ebbing banking sector fears combined with encouraging United States Pending Home Sales Index unexpectedly rose 0.8% last month to the highest level since August. Meanwhile, on an annualized basis, the Pending Home Sales Index tumbled -21.1% in February vs. -29.4% expected. These factors underpinned the US Dollar recovery even though the US Treasury bond yields consolidated at higher levels.
Offering additional legs to the US Dollar’s revival was comments by the Republican Representative Kevin Hern, cited by Bloomberg early Thursday. Hern said, “Federal Reserve Chair Jerome Powell, asked in a private meeting with US lawmakers how much further the central bank will raise interest rates this year, pointed to policymakers’ latest forecasts showing they anticipate one more increase.
Despite the hawkish repricing by markets for the Federal Reserve May rate hike decision, the US Treasury bond yields remain unperturbed, awaiting a fresh batch of United States economic data releases due on Thursday and Friday.
Euro area inflation data eyed but United States PCE holds the key
Gold traders gear up for for the final Q4 Gross Domestic Product (GDP) data release from the United States later in North American trading this Thursday. The data is unlikely to have any significant market reaction. However, the US weekly Jobless Claims could offer some incentives to traders. Speeches from the Federal Reserve officials will be closely followed for fresh hints on the US central bank’s next policy move.
Gold price action could also remain at the mercy of the month-end, as well as, the fiscal year-end flows, which will heavily affect the US Dollar valuations. Friday’s Fed’s preferred inflation gauge, the Core Personal Consumption Expenditures – Price Index, will steal the limelight. The measure is expected to hold steady at 4.7% YoY in February, although any upside surprise could cement a 25 bps Fed rate hike next month. Gold price could extend its correction in the aftermath.
Ahead of that, all eyes will remain on inflation data from the euro area’s largest economy, Spain and Germany. The data is likely to stir volatility in an otherwise quiet trading day so far. An unexpected increase in the Spanish and German Harmonized Index of Consumer Prices (HICP) could revive bets for bigger European Central Bank (ECB) rate hikes going forward, weighing down on the non-interest-bearing Gold price.
Gold price technical analysis: Daily chart
As observed on the daily sticks, Gold price has charted a pennant formation after peaking out at $2,010 last week.
At the moment, Gold price is challenging the critical rising trendline support at $1,953, which if broken on a daily closing basis will confirm a down break from the pennant.
The next strong support for Gold bulls awaits at the $1,940 round level, below which the previous week’s low at $1,935 will be a tough nut to crack for bears.
Further south, Gold sellers will aim for a test of the bullish 21-Daily Moving Average (DMA) at $1,916.
The 14-day Relative Strength Index (RSI) is edging lower but trades above the midline, suggesting that Gold price could see some dip-buying.
If Gold price bounces off the abovementioned trendline support, then a fresh run-up toward the static resistance at $1,975 cannot be ruled out.
Buyers will then look out for the weekly high at $1,981 on their way to the $2,000 psychological level.
Full ArticleThursday 30th March 2023: Technical Outlook and Review
March 30, 2023 12:17 ICMarkets Market News
DXY:
The DXY index is currently experiencing a strong bearish momentum, as it is trading below a major descending trend line. This suggests that there is further room for the price to drop.
In terms of potential price movement, the index could potentially continue its bearish momentum towards the 1st support level at 101.93. This level is a multi-swing low support and is also in confluence with the 78.60% Fibonacci retracement level. If price were to break this support level, it could drop further towards the 2nd support level at 100.82, which is a swing low support.
On the other hand, if price were to rise, it could face resistance at the 1st resistance level of 103.46, which is an overlap resistance level and also coincides with the 38.20% Fibonacci retracement level. A break of this resistance level could potentially lead to the next resistance level at 104.60, which is also an overlap resistance level.
EUR/USD:
The EUR/USD chart is currently experiencing bearish momentum, with the potential for a continuation towards the 1st support level.
The 1st support level is located at 1.0741, which is an overlap support and could potentially act as a barrier to further price declines. Additionally, this support level lines up with a 61.80% Fibonacci retracement, adding further weight to its significance. Should the price break through this level, the next support level is located at the same 1.0741 level, which is a multi-swing low support.
On the resistance side, we have the 1st resistance level at 1.0927, which is a swing high resistance. This level could potentially prevent the price from rising further. In addition to the 1st resistance level, there is an intermediate resistance level at 1.0845. This level is a multi-swing high resistance and lines up with a 61.80% Fibonacci retracement. A break above this level could trigger a bullish acceleration towards the 1st resistance level.
GBP/USD:
The overall momentum for the GBP/USD chart is bearish, with price potentially making a continuation towards the first support level.
Price is currently testing the first resistance at 1.2343, which is a multi-swing high resistance level. If price were to fail to break through this resistance, it could trigger a bearish move towards the first support at 1.2185. This level is a strong overlap support and has a 38.20% Fibonacci retracement lining up with it. If price were to break the first support, it could continue its bearish momentum towards the second support at 1.2127, which is also an overlap support and has a 38.20% Fibonacci retracement lining up with it.
There are two strong resistance levels that price could encounter on its way up. The first is at 1.2343, which has already been mentioned. The second resistance is at 1.2445, which is a multi-swing high resistance level. If price were to break through these two resistance levels, it could potentially shift the momentum to a bullish one.
It’s worth noting that there isn’t an intermediate resistance level between the current price and the first resistance level. This means that if price were to break through the first resistance, it could potentially trigger a strong bullish move towards higher resistance levels.
USD/CHF:
The USD/CHF pair is currently experiencing a bearish momentum on the chart, with price potentially continuing its bearish movement towards the first support. The pair’s overall momentum is bearish, and this is due to it being below a major descending trend line.
If the price continues its bearish momentum, it could potentially reach the first support at 0.9120. This level is a swing low support and could potentially halt the price’s drop. In case the price breaks through the first support, it could potentially reach the second support level at 0.9068. This level is a multi-swing low support and has held the price up several times in the past.
On the other hand, if the price manages to reverse its bearish momentum, it could potentially reach the first resistance at 0.9208. This level is an overlap resistance and could potentially push the price down. If the price manages to break through the first resistance, it could potentially reach the second resistance at 0.9257. This level is an overlap resistance and has a 61.80% Fibonacci retracement lining up with it.
USD/JPY:
The overall momentum of the USD/JPY chart remains bearish, with the price potentially making a bearish reaction off the 1st resistance and dropping towards the 1st support. The 1st support at 131.59 is a strong level, as it coincides with an overlap support and a 38.20% Fibonacci retracement. If the price were to break below this support, the next support level it could drop to is the 2nd support at 129.61, which is a multi-swing low support and a 78.60% Fibonacci retracement.
On the other hand, the 1st resistance at 132.81 is also a significant level, as it lines up with an overlap resistance and a 38.20% Fibonacci retracement. If the price were to break above this resistance, it could potentially rise towards the 2nd resistance at 134.55, which is an overlap resistance and a 61.80% Fibonacci retracement.
AUD/USD:
The overall momentum of AUD/USD is currently bearish. The price could potentially continue its bearish trend towards the first support at 0.6640, which is an overlap support. The second support at 0.6549 is a swing low support and could serve as a strong level if the price were to continue to drop.
On the other hand, the first resistance at 0.6774 is an overlap resistance and coincides with a 38.20% Fibonacci retracement. A breakout from this resistance level could signal a reversal of the current bearish momentum. The second resistance at 0.6876 is also an overlap resistance that the price may struggle to break through.
There is an intermediate resistance at 0.6712 between the current price and the first support. This is a multi-swing high resistance that aligns with a 61.80% Fibonacci retracement. If the price were to break this intermediate resistance level, it could trigger a strong bullish move towards the first resistance.
NZD/USD:
The NZD/USD chart is currently exhibiting bearish momentum, with the price potentially making a bearish continuation towards the 1st support. The first support is at 0.6180, which is a multi-swing low support that has held up in the past. If the price were to break through this support level, the next level it could drop to is the 2nd support at 0.6144. This support level is an overlap support and coincides with the 78.60% Fibonacci retracement, making it a strong level of support.
On the resistance side, the first resistance level is at 0.6266, which is an overlap resistance. The second resistance level is at 0.6388, which is also an overlap resistance. These levels could potentially hold up and prevent the price from rising any further.
USD/CAD:
The USD/CAD chart is showing overall bullish momentum, with price potentially bouncing off the 1st support level at 1.3521 and heading towards the 1st resistance level at 1.3657.
The first support level is a strong overlap support and could provide a solid foundation for the price to bounce back up. Additionally, there’s an intermediate support level at 1.3560 that coincides with the 50% Fibonacci retracement, adding to its strength as a potential support level.
On the resistance side, the 1st resistance level is also an overlap resistance and coincides with the 38.20% Fibonacci retracement, adding to its significance as a potential level for price to encounter resistance. If price were to break through the 1st resistance level, the next level it could potentially face is the 2nd resistance level at 1.3804, which is a multi-swing high resistance level.
DJ30:
The DJ30 chart has shown a bullish momentum lately, with prices potentially continuing to rise towards the 1st resistance level. Currently, the price is above both the Ichimoku cloud and an ascending trend line, providing support for a bullish continuation.
Looking at the support and resistance levels, we can see that the 1st support level is at 32,247.39, which is an overlap support. The 2nd support level is at 31,754.50, which is a multi-swing low support. These levels provide strong support for the price to potentially bounce off and head towards the 1st resistance level.
The 1st resistance level is at 32,990.69, which is an overlap resistance, and is also at the 50% Fibonacci retracement level. The 2nd resistance level is at 33,506.11, which is also an overlap resistance. The intermediate resistance level at 32,736.24 is a multi-swing high resistance and is at the 61.80% Fibonacci retracement level.
It’s important to note that while the chart has a bullish bias, there is still potential for the price to drop towards the support levels. However, if the price can bounce off the support levels, the momentum could carry the price towards the resistance levels.
GER30:
Overall, the momentum of the GER30 chart is bullish, as price is currently above the bullish Ichimoku cloud. This suggests that there is good support in place, contributing to the bullish momentum.
Price could potentially make a bullish continuation towards the first resistance level. However, it’s important to note that the overall momentum of the chart is always subject to change.
The first support level is located at 14960.89, which is an overlap support level. If the price falls towards this level, it is likely to find support and bounce back up. The second support level is at 14807.31, which is another overlap support level and coincides with the 61.80% Fibonacci retracement level. This support level may also provide a good buying opportunity.
On the other hand, the first resistance level is at 15241.58, which is an overlap resistance level. If the price rises towards this level, it is likely to face some selling pressure. The second resistance level is at 15488.32, which is also an overlap resistance level. If the price manages to break above this level, it could signal a strong bullish momentum and potential buying opportunity.
In summary, the overall momentum of the GER30 chart is bullish, and the price could potentially make a bullish continuation towards the first resistance level. The first and second support levels are at 14960.89 and 14807.31, respectively, while the first and second resistance levels are at 15241.58 and 15488.32, respectively. These levels are important to keep an eye on for potential buying or selling opportunities.
BTC/USD:
The overall momentum of BTC/USD remains bullish, as the price has the potential to continue its rise towards the first resistance level.
At present, the first support level is at 25966, which is a good multi-swing low support and coincides with the 38.20% Fibonacci retracement level. The second support is at 24526, which is another overlap support and coincides with the 50% Fibonacci retracement level. If the price bounces from the first support, it could rise to the first resistance level at 29373, which is a swing high resistance.
In addition, there is an intermediate resistance level at 28690, which is a good multi-swing high resistance level. If the price breaks through this intermediate resistance, it could potentially trigger a stronger bullish acceleration towards the first resistance.
US500
The US500 chart is currently showing bullish momentum, as the price is above a major ascending trend line. There are two potential support levels that could see the price bounce off and continue the bullish trend. The first support is located at 3903.06 and it is a multi-swing low support level. The second support is located at 3843.60 and it is also a multi-swing low support level.
On the other hand, there are also two potential resistance levels that the price could reach. The first resistance level is at 4038.30 and it is an overlap resistance level, with 78.60% Fibonacci retracement. The second resistance level is at 4077.26 and it is also an overlap resistance level.
If the price continues to show bullish momentum, it could potentially reach the first resistance level and bounce off it, continuing the uptrend. However, if the momentum turns bearish, the price could potentially drop to the first support level or even lower, breaking the ascending trend line and indicating a reversal of the overall bullish trend.
ETH/USD:
The overall momentum of the ETH/USD chart is bullish, indicating that there may be further upside potential in the near term. This is due to the fact that price is currently above a major ascending trend line, suggesting that bullish momentum is on the cards.
Looking at the potential price action, there is a possibility for a bullish continuation towards the first resistance level at 1852.01. Before that, the price could potentially bounce off the first support at 1667.31, which is a good level of support and also coincides with the 38.20% Fibonacci retracement level. If the price falls further, it could find support at the second level at 1558.42.
In terms of resistance, the first level at 1852.01 is a good level of overlap resistance. If the price manages to break above this level, it could potentially head towards the next resistance level at an overlap resistance of 1972.94.
WTI/USD:
WTI remains in a bearish momentum as the price could potentially make a bearish continuation towards its first support. The first support is seen at 71.46, which is an overlap support and a 38.20% Fibonacci retracement level. If the price breaks below this level, it could continue to drop towards the second support at 66.98, which is another overlap support.
On the upside, the first resistance is seen at 74.07, which is an overlap resistance and a 61.80% Fibonacci retracement level. If the price manages to break above this level, it could head towards the second resistance at 77.39, which is a multi-swing high resistance and a 78.60% Fibonacci retracement level.
XAU/USD (GOLD):
The price of XAU/USD is currently experiencing bearish momentum, indicating that it may potentially move towards the 1st support level. The overall momentum of the chart is bearish.
The 1st support level is at 1936, which is a good support level because it is an overlap support and coincides with the 38.20% Fibonacci retracement level. The 2nd support level at 1910 is also a good support level as it coincides with the 50% Fibonacci retracement level and is also an overlap support.
On the resistance side, the 1st resistance level is at 1980, which is a good resistance level as it is an overlap resistance and coincides with the 61.80% Fibonacci retracement level. The 2nd resistance level at 2022 is also a good resistance level as it is a multi-swing high resistance.
end.
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USD/JPY back in line after yesterday’s jump higher
March 30, 2023 12:09 Forexlive Latest News Market News
Despite bond yields advancing on Tuesday, the pair fell before rebounding in trading yesterday as yields continue to hold higher on the week so far. I outlined that here yesterday, noting that price action is adjusting accordingly to sentiment in the bond market.
After the notable moves in the past two days, USD/JPY is pretty much back in line now and trading back in and around its typical correlation to 10-year Treasury yields.
As such, don’t expect too much outsized moves later in the session ahead unless either the bond market starts to run and/or the US dollar itself finds a reason to stretch out against the rest of the major currencies bloc.
Looking ahead, inflation data in Germany and Spain today will be ones to watch as potential catalysts for rates action. But keep an eye out on flow-based movements as well, with month-end and quarter-end trading in consideration too.
Full ArticleIC Markets Asia Fundamental Forecast | 30 March 2023
March 30, 2023 12:09 ICMarkets Market News
IC Markets Asia Fundamental Forecast | 30 March 2023
What happened in the US session?
The US Pending Home Sales m/m data release indicates a positive change of 0.8% (forecast -2.9%, previous 8.1%) in the number of homes under contract for sale in the last month, suggesting an improvement amid the slowdown of the housing market.
What does it mean for the Asia Session?
The data-light session will likely see the major pairs consolidate in the ranges established during the prior session.
The Dollar Index (DXY)
Key news events today
Final GDP q/q
Unemployment Claims
What can we expect from DXY today?
The forecasted and previous data show no change in the US final GDP q/q at 2.7%. However, Unemployment Claims are expected to increase from 191K to 196K. This could indicate weakness in the labour market and the overall economy, negatively impacting the USD.
Central Bank Notes:
- The US banking system is sound and resilient, but recent developments may result in tighter credit conditions for households and businesses.
- The Federal Reserve has raised the target range for the federal funds rate to 4-3/4 to 5 per cent, committed to returning inflation to its 2 per cent objective.
- In determining the extent of future increases in the target range, the Committee will consider various factors, including the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and economic and financial developments.
- Next meeting is on 3 May 2023
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The latest CPI y/y for Australia showed a consecutive drop, suggesting an easing global inflation situation and potentially leading to a decrease in gold prices.
Next 24 Hours Bias
Weak Bearish
The Australian Dollar (AUD)
Key news events today
No major news events.
What can we expect from AUD today?
No major news event for AUD today. The price direction could draw from the previous CPI y/y data release, which showed a consecutive drop to 6.8%.
Central Bank Notes:
- Cash rate raised by 25 basis points to 3.60%.
- Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
- Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
- Next meeting on 4 April 2023
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
No major news events.
What can we expect from NZD today?
The NZ Building Consents m/m data showed a 9.0% decline, far below the previous figure of 5.2%. This suggests a slowdown in the construction industry and may lead to a depreciation in the NZD. A drop in the upcoming release of the ANZ Business Confidence (previous -43.3) could exacerbate a downward price movement.
Central Bank Notes:
- Monetary Policy Committee increased the OCR from 4.25% to 4.75%
- Higher interest rates are needed to reduce inflation and support employment sustainably
- Severe storms in North Island will increase inflation and disrupt production.
- Next meeting is on 5 April 2023
Next 24 Hours Bias
Mixed
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
There is no major news event for JPY today, so price direction may depend on expectations for upcoming data releases. Tokyo Core CPI y/y is expected at 3.1%, down from the previous 3.3%. The anticipated drop in consumer prices could lead to a decline in JPY.
Central Bank Notes:
- The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2%
- Japan’s economy is expected to recover gradually
- The bank will not hesitate to take additional easing measures if necessary
- Next meeting is on 27 April 2023
Next 24 Hours Bias
Weak Bearish
The Euro (EUR)
Key news events today
German Prelim CPI m/m
What can we expect from EUR today?
The forecasted data is 0.6%, slightly lower than the previous month’s figure of 0.8%. If the actual figure comes in below the forecast, it may signal lower inflationary pressures but could lead only to a slight decrease in the value of the EUR since the ECB expressed hawkishness even amid the banking crisis.
Central Bank Notes:
- ECB raised interest rates by 50 basis points to ensure the 2% inflation target is met
- Inflation is projected to average 5.3% in 2023, with growth at 1%, and underlying price pressures remain strong
- The bank will continue to monitor market tensions closely and will be data-dependent in its policy rate decisions
- Next meeting on 4 May 2023
Next 24 Hours Bias
Mixed
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
As there is no major news event for the currency today, the price direction of CHF is likely to draw from the previously released Credit Suisse Economic Expectations data that showed a value of -41.3 (previous -12.3). This indicates that there has been a significant drop in economic expectations over the given time frame, which could lead to a decrease in the value of CHF.
Central Bank Notes:
- Raised policy rate to 1.5% to counter inflationary pressure and ensure price stability. The SNB may need to raise the policy rate further in the future
- The SNB is providing liquidity assistance to Credit Suisse, and the crisis has been halted
- The new inflation forecast assumes a policy rate of 1.5% and puts average annual inflation at 2.6% for 2023 and 2.0% for 2024 and 2025.
- Mortgage and real estate market vulnerabilities persist
- Next meeting on 11 April 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
MPC member Mann’s speech stated that reducing UK services inflation from 6% to 2% will be challenging, causing uncertainty and potentially reducing GBP’s value against other major currencies. The long-term impact is still being determined, but the BoE’s strong track record of managing inflation will likely prevent significant changes, despite the persistent core inflation remaining.
Central Bank Notes:
- The BoE’s MPC increased the Bank Rate by 25bps to 4.25%, with a majority of 7-2 in favour of the hike
- The UK banking system is judged to be robust and resilient.
- CPI inflation increased unexpectedly but is expected to fall sharply over the rest of the year due to lower energy prices.
- The MPC will continue to monitor inflationary pressures and adjust Bank Rate as necessary.
- Next meeting on 11 May 2023
Next 24 Hours Bias
Weak Bearish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
Governor Council Member Gravelle suggests large-scale GOC bond purchases if faced with severe dysfunction, while Canada’s well-regulated financial system may still be affected by global events. Support for the system would be provided in times of widespread stress.
Central Bank Notes:
- Bank of Canada maintains its target for the overnight rate at 4.5%
- Inflation eased in January, but price increases for food and shelter remain high
- BOC is prepared to increase the policy rate further to return inflation to the 2% target.
- Next meeting on 12 April 2023
Next 24 Hours Bias
Mixed
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Crude Oil Inventories decreased by 7.5M barrels, surpassing the forecasted and previous numbers of 1.8M and 1.1M barrels, respectively. This implies a reduction in supply and could lead to increased oil prices.
Next 24 Hours Bias
Bullish
USD/INR Price News: Oscillates above 82.20 as US PCE Price Index hogs limelight
March 30, 2023 12:09 FXStreet Market News
- USD/INR is consolidating in a narrow range above 82.20, upside seems favored amid a recovery in US Dollar.
- The odds of hawkish Fed bets have improved as Fed Powell has anticipated one more rate hike this year.
- Fed Barr assured investors that the failure of a couple of lenders is unable to lead to a widespread contagion.
The USD/INR pair is displaying a sideways performance in a narrow range above 82.20 in the Asian session. The asset registered a positive opening as investors discounted overnight recovery in the US Dollar Index (DXY). The USD Index rebounded firmly after sensing decent buying interest near 102.40. The US Dollar Index is looking to extend its recovery above 102.78 as odds for one more rate hike by the Federal Reserve (Fed) have strengthened.
The market sentiment looks cautiously optimistic as S&P500 futures have eased nominal gains in the Asian session after a stellar buying on Wednesday. The demand for US government bonds is easing further amid anticipation of one more interest rate hike by Fed chair Jerome Powell and ebbing banking turmoil fears.
The USD Index is regaining traction as bets for steady monetary policy by the Fed have trimmed. As per the CME Fedwatch tool, chances for an unchanged policy stance by the Fed have been trimmed to 54%.
Investors are now anticipating that the US banking crisis won’t have more collateral damage, however, the credit conditions will remain extremely tight. The commentary from Federal Reserve (Fed) Vice Chair for Supervision Michael Barr to Senate Banking Committee that the United States banking system is ‘sound and resilient’ brought a sense of relief for the market participants. He assured investors that the failure of a couple of lenders is unable to lead to a widespread contagion.
On the Indian rupee front, the Reserve Bank of India (RBI) has allowed 18 countries to pay off international payments through Indian Rupee. The global economic slowdown has delivered an opportunity to trim dependence on US Dollar.
Full ArticleGold Price Forecast: XAU/USD faces hurdles near $1,960 as Fed Powell anticipates one more rate hike
March 30, 2023 11:29 FXStreet Market News
- Gold price is facing resistance around $1,960.00 as Fed Powell is anticipating one more rate hike.
- Fed Powell and US lawmakers have discussed raising insurance limits after the collapse of SVB and Signature Bank.
- Gold price is demonstrating a sheer contraction in volatility amid the absence of potential triggers.
Gold price (XAU/USD) has sensed barricades near $1,960.00 in the Asian session. The precious metal has shifted its auction below $1,960.00 led by easing United States banking jitters and growing chances of one more interest rate hike by the Federal Reserve (Fed).
S&P500 futures have witnessed minimal losses in the Tokyo session after a stalwart buying on Wednesday, indicating that the overall market mood is cheerful but caution has emerged after commentary from Fed chair Jerome Powell.
Republican Representative Kevin Hern reported through Bloomberg that Fed Powell still sees one more rate hike when asked in a private meeting with US lawmakers about how much further the central bank will raise interest rates this year.
The US Dollar Index (DXY) has shown a recovery and is hovering near Wednesday’s high around 102.77. The USD Index is looking to extend its upside move further on hopes of rising hawkish Fed bets.
Meanwhile, the display of meaningful efforts by US authorities to infuse confidence among investors that the banking system is ‘sound and resilient’ has also trimmed appeal for the Gold as a safe-haven. US lawmakers and Fed Powell have discussed the need of raising insurance limits after the collapse of Silicon Valley Bank (SVB) and Signature Bank. Currently, the Federal Deposit Insurance Corporation (FDIC) currently insures up to $250,000 per depositor.
Gold technical analysis
Gold price is demonstrating a sheer contraction in volatility amid an absence of potential triggers. Broadly, the asset is auctioning in a Symmetrical Triangle chart pattern on an hourly scale. The upward-sloping trendline of the chart pattern is plotted from March 22 low at $1,934.34 while the downward-sloping trendline is placed from March 20 high at $2,009.88.
Inside the broader triangle, a small xSymmetrical Triangle is also emerging, which is indicating a build-up of strength for a decisive move.
The Gold price has dropped below the 20-period Exponential Moving Average (EMA), which is at $1,963.66, indicating a short-term bearish trend.
Meanwhile, the Relative Strength Index (RSI) (14) has slipped into the bearish range of 20.00-40.00. The absence of divergence and oversold signals cement more downside.
Gold hourly chart
IMF’s Georgieva: Urgently need faster, more efficient mechanisms for providing debt support
March 30, 2023 11:29 FXStreet Market News
International Monetary Fund’s (IMF) Managing Director Kristalina Georgieva said on Thursday, “Urgently need faster, more efficient mechanisms for providing debt support to vulnerable countries.
Additional takeaways
Full ArticleCountries in a stronger position should help vulnerable members of global community, particularly those in debt distress.
Establishing such mechanisms would provide significant benefits to debtors and creditors alike.
Success would remove one important source of uncertainty from global picture.
Welcome China’s engagement in common framework, participation in new global sovereign debt roundtable.
Countries should cooperate to reinvigorate international trade in equitable way, diversify supply chains based on economic logic.
Asia would be most adversely affected by runaway fragmentation.
IMF research shows long-term cost of trade fragmentation as high as 7% of global GDP.
Governments’ fiscal policies should provide targeted support to those most in need or most affected by food insecurity, cost-of-living crisis.
AUD/USD stays depressed below 0.6700 as RBA hawks retreat, risk dwindles
March 30, 2023 11:17 FXStreet Market News
- AUD/USD holds lower grounds amid cautious markets, receding hawkish bias for RBA.
- China’s Premier sounds hopeful of upbeat growth but Sino-American woes cross the optimism.
- NAB cuts RBA rate forecasts after downbeat inflation, Retail Sales.
- Fed hawks also wait for more clues to confirm further hawkish moves and put a floor under the Aussie price.
AUD/USD fades bounce off intraday low even as Chinese Premier tries to lure the bulls during early Thursday. The reason could be linked to the fresh Sino-American tension over Taiwan and the recently dovish concerns about the Reserve Bank of Australia’s (RBA) next moves. That said, the Aussie pair drops to 0.6670 during the two-day downtrend by the press time.
China’s Premier Li Qiang recently said that the economic situation in March is even better than in January and February. The policymaker, however, also raised geopolitical tension by opposing trade protectionism and decoupling, which indirectly targets the US.
Elsewhere, the National Australia Bank (NAB) cut its forecast for the RBA peak rate to 3.85% from 4.15% after witnessing the recent fall in inflation and Retail Sales figures. The NAB also expects a 0.25% rate hike in April. It should be noted that Westpac, Commonwealth Bank of Australia (CBA) and Australia and New Zealand Banking Group (ANZ) all of them expect a pause in the RBA’s rate hike trajectory after April’s 25 basis points (bps) of a lift in the benchmark rates.
It should be noted that Fed Chair Jerome Powell’s teasing of one more rate hike joined Fed Vice Chair for Supervision Michael Barr’s emphasis on data dependency to allow the US Dollar to remain firmer. On the same line could be Fed Chair Powell’s push for alteration in deposit insurance. As a result, the Fed hawks do flex their muscles but wait for more clues and amplify the market’s anxiety ahead of Friday’s key inflation gauge from the US, namely the Core Personal Consumption Expenditure (PCE) Price Index.
Amid these plays, the S&P 500 Futures struggle around a one-week high marked the previous day, while ignoring Wall Street’s upbeat performance, whereas the US 10-year and two-year Treasury bond yields grind higher after teasing the bond buyers the previous day.
It’s worth mentioning that Australia’s Job Vacancies improved in February, to -1.5% QoQ versus -4.9% prior while the US Pending Home Sales grew 0.8% MoM during the said month versus -3.0% expected and 8.1% prior.
Looking ahead, preliminary readings of the US fourth quarter (Q4) Core Personal Consumption Expenditure (PCE) and the final numbers for the US Q4 Gross Domestic Product (GDP) will be important to watch for the AUD/USD pair traders for intraday directions.
Also read: US February PCE Inflation Preview: Bad news for the Dollar, good news for the Fed?
Technical analysis
AUD/USD grinds lower between 200-DMA and a three-week-old ascending support line, respectively near 0.6755 and 0.6650.
Full ArticleForexLive Asia-Pacific FX news wrap: Major FX trades subdued ranges in Asia
March 30, 2023 11:02 Forexlive Latest News Market News
It
was a quiet day for news of any impact and data flow was light also.
From
Australia we had job vacancy data. These recorded their third q/q
fall but remain historically super-high. Also today relevant to
Australian labour markets was the country’s peak trade union body
submitted a proposal for a 7% minimum wage rise. Australia’s
government supports the idea of a minimum wage hike but didn’t
comment on the specific 7% number. A decision on the minimum wage
level is expected in June. There will be a rise, circa 5% seems to be
the expected.
The
RBA will be eyeing the potential for wages boosting inflation.
Speaking of the Reserve Bank of Australia, their meeting is next
week, April 4. Three of Australia’s four big banks are now
expecting a pause with ANZ the hold out at forecasting a +25bp rate
hike.
For
the Australian dollar, it has dribbled lower on the session but got a
minor pop from its low coinciding with reassuring comments from
China’s new Premier Li Qiang at the Boao Forum in Hainan.
Asian
equity markets:
-
Japan’s
Nikkei 225 -0.7% -
China’s
Shanghai Composite -0.4% -
Hong
Kong’s Hang Seng -0.4% -
South
Korea’s KOSPI +0.46% -
Australia’s
S&P/ASX 200 +1.05%
EUR/USD bears target 1.0800 on daily Doji, mixed Fed talks ahead of ECB Bulletin, German inflation
March 30, 2023 10:51 FXStreet Market News
- EUR/USD justifies the previous day’s bearish candlestick to refresh intraday low, prints the biggest intraday loss in four day.
- A less hawkish ECB talks join consolidation ahead of the key inflation numbers to tease Euro bears.
- Fed officials also appear unclear about their next moves even as banking fears recede.
- ECB’s Economic Bulletin, preliminary readings of Germany’s HICP for March eyed for fresh impulse.
EUR/USD bears are in the driver’s seat after a four-day off as the major currency pair drops to 1.0830 while extending the previous day’s U-turn from the weekly high amid early Thursday. In doing so, the Euro pair portrays the market’s consolidation ahead of the key German inflation data and the European Central Bank’s (ECB) monthly Economic Bulletin. Additionally, the market’s cautious mood and the US Dollar’s sustained recovery also weigh on the quote of late.
That said, the pair refreshed the weekly top on Wednesday after ECB policymaker Peter Kazimir and Chief Economist Philip Lane advocated for further rate hikes. However, ECB Policymaker Isabel Schnabel said that underlying inflation in the Eurozone is proving sticky and hence raised doubts about the regional central bank’s future hawkish bias.
On the other hand, Fed Chair Jerome Powell’s teasing of one more rate hike joined Fed Vice Chair for Supervision Michael Barr’s emphasis on data dependency to allow the US Dollar to remain firmer. On the same line could be Fed Chair Powell’s push for alteration in deposit insurance.
It should be noted that Germany’s GfK Consumer Confidence figures for March improved to -29.5 from -30.6 revised prior, not to forget mentioning -29.2 market forecasts. The US Pending Home Sales for February, however, grew 0.8% MoM versus -3.0% expected and 8.1% prior.
On a broader scale, the optimism surrounding the technology and banking sector puts a floor under the EUR/USD prices even as nuclear threats from Russia and North Korea join the US-China tussles to weigh on the risk profile and the pair prices of late.
While portraying the mood, the S&P 500 Futures struggle around a one-week high marked the previous day, while ignoring Wall Street’s upbeat performance, whereas the US 10-year and two-year Treasury bond yields grind higher after teasing the bond buyers the previous day.
Looking ahead, the ECB’s Economic Bulletin and Germany’s preliminary readings of the Harmonized Index of Consumer Prices (HICP) gauge for March will be crucial for the EUR/USD pair traders to watch considering the latest reduction in the inflation woes and the USD rebound.
Technical analysis
Wednesday’s Doji candlestick on the EUR/USD pair’s daily chart gains more attention from the sellers as it stands at the weekly top.
Full ArticleChina’s Premier Li: Oppose trade protectionism and decoupling
March 30, 2023 10:51 FXStreet Market News
Speaking at Boao Forum on Thursday, China’s Premier Li Qiang said that he opposes trade protectionism and decoupling.
Additional quotes
To achieve greater success, chaos and conflicts must not happen in Asia.
Otherwise the future of Asia will be lost.
We need to implement the GSI, uphold the vision of comprehensive security and oppose unilateral sanctions.
Oppose taking sides, forming blocs and new cold war.
Further liberalize global trade and investment.
Keep global supply chains stable and smooth.
Inject strong dynamism into the global economy.
The issues facing humanity need to be addressed through consultation with all.
We need to send a positive signal of upholding multilateralism to make global governance system more just and equitable.
In this uncertain world, the certainty that china offers is an anchor for global peace and development.
No matter how the world’s situation evolves, we will remain committed to reforms and opening up.
The economic situation in march is even better than in January and February.
Will roll-out new measures to increase market access and improve business environment.
We will effectively prevent and diffuse major risks, particularly in the financial sector.
Market reaction
The above comments have little to no impact on the Australian Dollar, as the AUD/USD pair keeps the red near 0.6675, at the time of writing.
Full Article