Daily Outlook

March 28, 2017

On Wednesday Theresa May will announce to Parliament that Article 50 has been triggered. Article 50 will be handed over on Wednesday at 11:30pm (AEDT) to EU council president Donald Tusk, who then has 48 hours to reply, which indicates the start of an 18-month negotiation period on Britain’s exit from the EU. Sterling volatility is expected to pick up this week, any hint of a rejection should create opportunities. Traders advised to be aware of developments.

Yesterday saw a busy Asian session with several markets gapping on the open.

The Euro gapped 35 pips higher as Emmanuel Macron looks set to win the first round of the French election in four weeks’ time, this was in conjunction with Merkel’s party win on Sunday. The Euro touched 1.0906, currently trading 1.0864. The currency is up 3.1% on the month.

The FTSE (-0.59%), DAX (-0.57%) and CAC (-0.07%) all closed lower on Monday night after Trump failed to deliver on his health care plan – these markets played catch up to struggling Dow and S&P markets as they were sold from the get-go yesterday. US markets have recovered yesterday’s Asian session losses, with the DOW currently eyeing a break through 20,582, Mondays gap level.

The ASX200 recovered overnight from a 60 point sell off, showing strength by closing Monday mornings gap and trading through 5,770.

The Yen gapped lower and was sold off to Nov 2016 lows of 110.111. Large bids touted to be at 110.00-10 could defend the level in the immediate term. The currency has bounced and is currently trading the 110.627 level.

Big moves in Iron ore (-4.1%) and pressure in the coal futures market (-2.1%) yesterday, reaching February lows, should be a flag for traders to be watching the Aussie. Trading right in the middle of its Feb-Mar range at 0.7617, the currency is facing pressure. A lack of local data this week may mute moves, look to the US/UK/EU for direction this week.

 

Today’s calendar (AEST)

RBA Gov Debelle speaks at 9:00am

FOMC Kaplan speaking at 9:30am

In the US Session

CB Consumer Confidence is released at 1:00am

BOC Gov Poloz speaks at 1:10am

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