The culmination of month and quarter-end flows threw a curveball into market correlations in a NY session that witnessed stocks and the USD move higher in tandem. Equities managed to eke out a modest +1.3% rally as a late session decline pared earlier gains. The S&P close below 800 for the second day in a row is an ominous sign as we head into the second quarter. Gold traded in a relatively tight range and was about +$3 higher near 918/919 as the session approached the close.

Economic data out of the US was on the weak side with Chicago PMI printing below expected at 31.4 in March after a 34.2 prior. Consumer confidence rose to 26.0 from 25.3 but this was also below expectations and the labor differential continued to deteriorate to -44.1 from -42.3 the previous month – not good for the unemployment rate. The market shrugged off the poor results as flow mattered more.

USD selling into the month and quarter-end fix never really materialized in NY trading and looked to have been done in the prior sessions already. EUR/USD sank -35 pips and was sitting near 1.3260/70 near the close. Trendline and 55hr support lurk by 1.3235 and this looks to be the next important support zone here. Expect good resistance into 1.3300 and 1.3340 to the upside.

The yen crosses remained bid as Japanese yearend repatriation flows dissipated. USD/JPY added another 40 points to near the 98.90/85 zone. The 200-day moving average is currently by 99.25/30 and a close above there in the next few days should elicit another push higher targeting the 22-Oct and 4-Nov highs at 100.67. EUR/JPY moved up a less impressive 15 pips to 131.10/20 as EUR weakness kept the gains modest here. Japan's Tankan index is due up in the Asia session and this could exacerbate JPY weakness.

USD/CAD extended gains about 70 pips towards 1.2615/20 as oil prices lost some ground to just above $49 in the session. The pair found a barrier at 1.2650 again today and this was a great level of resistance yesterday. Failure to take it out could be setting up an hourly double-top here. We would need back through 1.2500 (potential neckline) to confirm, however. If oil heads higher in the next few days this would become more likely and would open up potential back to 1.2400 again.

Upcoming Economic Data Releases (Asia Session) prior  expected

  • 3/31 22:30 GMT AU  AiG Performance of Mfg Index  MAR  31.7  - -
  • 3/31 23:50 GMT JN  Loans & Discounts Corp YoY  FEB  3.80%  - -
  • 3/31 23:50 GMT JN  Tankan Lge Manufacturers Index  1Q  -24  -55
  • 3/31 23:50 GMT JN  Tankan Lge Mfg Outlook  1Q  -36  -52
  • 3/31 23:50 GMT JN  Tankan Non-Manufacturing  1Q  -9  -25
  • 3/31 23:50 GMT JN  Tankan Non-Mfg Outlook  1Q  -14  -25
  • 3/31 23:50 GMT JN  Tankan Large All Indust Capex  1Q  -0.20%  -12.00%
  • 4/1 0:30 GMT AU  Retail Sales s.a. (MoM)  FEB  0.20%  -0.50%
  • 4/1 0:30 GMT AU  Building Approvals (MoM)  FEB  -3.70%  1.50%
  • 4/1 0:30 GMT AU  Building Approvals (YoY)  FEB  -33.50%  -30.00%
  • 4/1 5:00 GMT JN  Vehicle Sales (YoY)  MAR  -32.40%  - -
  • 4/1 5:30 GMT AU  RBA Commodity Index SDR YoY%  MAR  19.70%  - -