Forex Today: Aussie cheers Asia risk-reset; focus on Brexit/ UK politics

Forex today in Asia was an eventless, quiet affair, as the sentiment was mainly driven by the risk-recovery in the Asian equities and US equity futures, as the fears over China economic slowdown and trade war ebbed. Amid risk reset, the US dollar stuck to its recent bearish bias and traded broadly subdued, aiding the bounce in the Antipodeans. However, the upside attempts remained capped amid an uptick in the US Treasury yields. The USD/JPY pair faded a bounce to 110.25 and entered a consolidative phase near the 110 handle, as the US recession fears continue to outweigh the BOJ’s accommodative monetary policy stance. Also, the Yen flows and large options expiries amid fiscal year ending in Japan also remained the main catalyst behind the pair’s price action.

Among the European currencies, both the Euro and the GBP traded modestly flat, having given away early gains, as a lack of Brexit clarity continued to remain a drag, despite the UK Parliament’s takeover of the Brexit process for a day.

On the commodities front, both crude benchmarks rebounded amid a better environment towards the risk assets, with WTI headed back to 59.50 levels. Meanwhile, gold prices on Comex extended its retreat from monthly tops near 1331 levels and traded near 1325 region towards Asia closing. 

Main Topics in Asia

Brexit Headlines

Government claims vote for Letwin's indicative votes plan sets 'dangerous precedent'

Brexit voting: Main motion result Yes 327 No 300

Corbyn comments: Where this government has failed, this House will succeed

Other Headlines

NZ: Trade surplus prints $12m in February - Westpac

Fed's Rosengren: Balance sheet likely to grow

Fed's Rosengren: Interest rate dot plot is not a promise of policy direction

Japan's Aso: Never said the 2% price goal be scrapped

Japan’s Motegi: Economy has sound fundamentals

Gold Technical Analysis: Bulls in control above 1316, targetting 78.6% Fibo in 1332s

WTI: 100-hour MA is capping upside on recession fears

North Korea: Trump was open to easing sanctions with 'snapback' clause - Yonhap

Dollar index holds below 100-day MA despite minor uptick in treasury yields

Asian stocks on recovery mode as investors reassess recession fears, bond yields rise

Key Focus Ahead

Markets brace for yet another data-light European session today, as the developments around the Brexit process remain the main focus that will offer fresh trading impetus to the EUR, GBP traders. However, the traders could receive some fresh cues on the Eurozone economic health from the German Gfk consumer climate data that will drop in at 0700 GMT.  From the UK docket, the second-liner BBA mortgage approval data will be reported at 0930 GMT. Which is likely to have virtually no impact on the markets.

The NA session has meaningful macro updates from the US, including the housing starts and building permits due at 1230 GMT. Later at 1400 GMT, the US Conference board consumer confidence data will be closely eyed for fresh dollar trades, as markets continue to track the US yields for fresh directives on the overall market sentiment. Meanwhile, oil traders will look forward to the US API weekly fuel stocks report that will be published at 2030 GMT.

EUR/USD: Stuck at 4H 200MA ahead of German data, focus on US yield curve

The EUR may pick up a strong bid if the German consumer confidence beats the expected print of 10.8. Post-German data the focus will likely shift back to the action in the German and US government bond yields.

GBP/USD: Upside remains capped amid Brexit uncertainty

The GBP/USD pair struggles between the British lawmakers’ inability to provide clarity over Brexit and recent weakness of the US Dollar. Looking forward, investors may keep a tab on the US data amid lack of economics from the UK while also observing developments surrounding the Brexit.

Gold Price Forecast: Why it is rising on US recession fears and the big levels to watch

The precious metal continues shining into the new week after recovering beforehand. The most recent driver of Gold is related to fears about a US recession. These concerns stem from the temporary inversion of the yield curve. 

US Conference Board Consumer Confidence Preview: Is sentiment enough?

The Consumer Confidence Index from the non-profit business group the Conference Board is projected to rise to 132.0 in March from 131.4 in February. 

RBNZ to reiterate the next move could be 'up or down' - UBS

The UBS analysts offer a sneak peek at what to expect from Wednesday’s Reserve Bank of New Zealand (RBNZ) monetary policy decision.

GMT
Event
Vol.
Actual
Consensus
Previous
Thursday, Mar 21
24h
 
 
24h
 
 
Tuesday, Mar 26
07:00
 
10.8
10.8
09:30
 
 
40.634K
n/a
 
 
-0.27%
12:30
 
1.215M
1.230M
12:30
 
1.300M
1.317M Revised from 1.345M
12:30
 
-0.60%
-1.76% Revised from 1.40%
12:30
 
-28.3%
18.6%
12:55
 
 
4.9%
12:55
 
 
-0.1%
13:00
 
4.0%
4.2%
13:00
 
0.3%
0.3%
14:00
 
 
14:00
 
12
16
15:30
 
 
2.47%
18:00
 
 
2.503%
20:30
 
 
-2.133M
23:10
 
 
Wednesday, Mar 27
01:00
 
1.75%
1.75%
01:00
 
 
02:00
 
 
08:00
 
 
08:45
 
 
09:00
 
 
-16.6
10:00
 
 
n/a
 
 
0.12%

 

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