Currency Updates:
AUD/USD Bear momentum in Asia carried over in Europe. AUD/USD set a new trend low of 0.7603 on the soft Oz NAB readings and broad based USD strength. A slight bounce had the pair near 0.7635 into NY’s open. The pair spiked above 0.7680 as USD/JPY collapsed from above 122.00 to sub-121.00 levels. AUD/USD’s gains didn’t last long though as general risk-off sentiment ensued. Weak stocks and bond yields combined with JPY strength to drive AUD/JPY below 92.30. This dragged AUD/USD from NY’s high towards 0.7610. Little bounce was seen as the pair sat near 0.7620 late in the day. Traders have March Westpac consumer sentiment data (prior 8.0%) and a speech from RBA Assistant Governor Kent to contend with later. A weak data print should weigh on AUD. If Kent should discuss AUD it’ll likely get hit as Kent will likely try to jawbone the currency lower. s it stands now bears have control. The pair broke below the bear flag bas and the February low. Longer-term bears now target the 0.7250 area which sits near the May 2009 low
EUR/USD Bears pushed EUR/USD below 1.0750 in Europe on fears of Greece’s ability or willingness to pay debts and broad based USD strength. NY walked in with the pair slightly off the lows. Early NY saw a lift above 1.0790 as USD/JPY fall from the 122.04 high brought on general USD weakness. EUR/USD’s gains evaporated though. The USD’s slide abated and general risk-off sentiment took hold. Soft US equities and bond yield combined with a strong JPY to push EUR/JPY down below 129.50. This dragged EUR/USD lower from NY’s high and towards 1.0690.Little lift from the low was seen as the pair sat just off the low late in the day. Bears are in control after a brief pause yesterday. Bear biased RSIs and widening yield spreads aid their cause. The clean break below the Sep 2003 low now have bears targeting the 1.0500 area where the Dec 202 high and March 2003 low sit. Longer-term bears are now taking about a move to parity as well. Upcoming risks today are China’s retail sales and Draghi’s speech to the Center for Financial Studies in Frankfurt Germany.
USD/JPY The 122.04 multi-year high scored in Asia was followed by a few more futile attempts to run past Japanese exporter and other offers by the figure. This wasn’t surprising given the intraday tumble in Tsy-JGB yield spreads and equity prices that began just before the high was scored. Japanese pensions, likely led by GPIF, appeared to leave their fingerprints as JGB yields climbed again, but this time there was not offsetting rise in stocks, there or here, just more Tsy buying. The latter was from all corners and has thus far managed to keep USD/JPY atop its hourly Cloud, even though 121 was breach in NorAm trading. More support is by 120.60 and 120.40. A potential bigger threat to USD/JPY’s uptrend is today’s N225 futures break below the uptrend from Jan lows. Between that, rising JGB yields and the big downward revision to Q4 GDP, the mkt will rumble louder for BOJ QQE3 this spring, rather than in H2 as had previously been the consensus. Grexit, Corinthia, France’s 2-yr fiscal target can-kick and ECB QE took EUR/JPY to new trend lows and below 130. Daily & monthly tech targets are by 128.50. JPY Corp Prices & Machine Ords are out tonight.
Gundlach: Stock market signaling it doesn’t like strong dollar
Although U.S. equities markets are signaling that a strong dollar may not be a good thing, the currency will keep getting stronger, according to one investing pro.
DoubleLine CEO and CIO Jeffrey Gundlach said during a Tuesday afternoon webcast about the firm’s total return fund that it seems the dollar accelerating to the upside is now seen as a negative for stocks. The greenback has been a “world beater,” and will continue to be until its strength becomes unsustainable, he said.
As for global equities, the investor said he continues to like India for the long term.
http://www.cnbc.com/id/102493596
Looking Ahead – Economic Data (GMT)
• 23:30 AU Consumer Sentiment Mar 8%-prev
• 00:30 AU Housing Finance Jan f/c -2%, 2.7%-prev
• 00:30 AU Invest Housing Finance* Jan f/c 6%-prev
• 23:50 JP Corp Goods Price MM* Feb f/c 0%, -1.3%-prev
• 23:50 JP Corp Goods Price YY* Feb f/c 0.5%, 0.3%-prev
• 23:50 JP Machinery Orders MM* Jan f/c -4.1%, 8.3%-prev
• 23:50 JP Machinery Orders YY* Jan f/c -1%, 11.4%-prev
• 05:30 CN Urban investment (ytd)yy* Feb f/c 15%, 15.7%-prev
• 05:30 CN Industrial Output YY* Feb f/c 7.8%, 7.9%-prev
• 05:30 CN Retail Sales YY* Feb f/c 11.7%, 11.9%-prev
Looking Ahead – Events, Other Releases (GMT)
• No Significant Events
