Currency Updates:
AUD/USD The 0.7829 high of the session for AUD/USD came in early NorAm trade and after the slightly less-dovish-than-forecast RBA Minutes pried loose some stale shorts. The odds of a March RBA rate cut weakened to about even money, while the AUD-JPY 2-yr spread rebounded for a second day. Prices are close to session highs as we head toward the NY close and also nearing the 21-DMA at 0.7848 and falling. Bigger resistance is the Feb 6 high at 0.7877 and the 38.2% of the Jan-Feb slide at 0.7882. The 50% of the same slide is reinforced by the daily Kijun at 0.7961. AUD/JPY spiked up to 50% of the 97.30-89.32 drop at 93.35, with the daily Kijun there as well. The Tenkan remains below the Kijun but today’s news Japan Post is bidding for Toll Holdings [ID:nL4N0VR3QY] gave that pair an extra boost. Japanese investor are expected to remain looking overseas for better returns this year, led by GPIF, but also with some FDI. LNY holidays kick off tomorrow and are seen dampening liquidity in Asia.
EUR/USD opened NYC 1.1440 on the retreat from O/N highs by 1.1450. The rally was sparked by comments from the Greek FinMin suggesting Greece would agree to a draft plan by EU’s Moscovici that would be an extension of the loan agreement, but not an extension of the current program. New York traded an edgy 1.1442/ 1.1381/ 1.1425 chop with rhetoric sparring, 20-30 pip gyrations on single headline prints. Underneath it all there was a EUR/USD steady bid, partially due to the O/N ZEW data but more related to an underlying belief that a deal would be struck, the latest tick up on “sources” in Brussels that aver Greece will request a six month loan extension tomorrow (not the bailout, just the loan see [ID:nL5N0VR4GO] ) ZEW
USD/JPY The yen fell far and wide, as it stood out as a safe short given new closing trend highs in the key Japanese stock indices, USD-JPY 2-yr yield spreads rising to their highest since Jan 6, indications from inside and outside the Abe govt that there is less resistance to a weaker yen and after a key technical buy signal in USD/JPY. Monday and today’s lows were rejected by 61.8% of the Feb range at 118.10, with help from the Kijun at 118.16. Reports that the Greek can would be kicked down the road at Wed’s ECB meeting on ELA extension gave risk a little boost and took USD/JPY beyond offers and stops circa 119. US econ data was not impressive, but the drumbeat for Fed rate hikes grows louder. Offers are at 119.50-57, 119.90-120 and into 120.50, where this month’s rally was rejected last week. EUR/JPY managed to clear offers at 136 on Greek ELA and bailout hopes, but that cross’s gains were less than CAD/JPY’s. AUD/JPY also had a strong session, making new Feb highs and retracing 50% of 97.39-89.32 slide at 93.35, where the daily Kijun stood. M&A of Japan Post for Toll Group noted there. Only BOJ tonight might be on 2% CPI timing extension.
Looking Ahead – Economic Data (GMT)
• No Significant Data
Looking Ahead – Events, Other Releases (GMT)
• : JP Bank of Japan announces interest rate decision
• 03:00 JP Bank of Japan Policy Statement/Kuroda Press Conference
