Forex today: yen was top performer in an otherwise healthcare bill let down

The FX space today was all about 'nothing'. The all was the fact that the House of Republican leaders were supposed to be voting on their health care bill, but the 'nothing' was that they didn't. 

House GOP leadership recently announced that there will not be a vote on the healthcare bill today. Instead, the entire House GOP conference will meet tonight at 7 p.m. to discuss next steps.

Price action in the markets in today's US session was subdued and consolidation took a hold.  The US 10yr treasury yields dropped again from 2.42% to 2.39% on the delays from the  House of Republican leaders before a bounce to 2.44% on hawkish Fed speak from Williams advocating at least three hikes this year. However, both yields and the dollar have dropped on confirmation that the health care bill vote would be delayed with the 10y at 2.41 and DXY 99.70 but little changed overall. The Fed fund futures yields are still signalling of a 60% chance of the next hike occurring in June. 

The yen was the top performer yet again with USD/JPY dropping from 111.58 down to 110.62 the low, currently back up to test the 111.00 handle in a recovery of the delayed healthcare bill trade.  The euro was sideways between 1.0805 and 1.0767 while the Aussie was the underperformer again, falling from 0.7665 to 0.7625 pressured by iron ore again.  The kiwi consolidated between 0.7030 and 0.7055. 

The day ahead

For the day ahead, New Zealand's trade balance will be in focus, and analysts at Westpac of the key event risks:

"NZ: trade balance for Feb is expected to be close to balanced at +$180m, exports slightly firmer and imports slightly weaker.

Japan: Mar flash manufacturing PMI is out after pushing above recent peaks in Feb to 53.3. Strength was particularly noticeable in the employment subcomponent – close to 5y highs.

Eurozone: Mar flash PMIs followed elevated Feb readings which had manufacturing at 55.4 and services at 55.5. The France output subcomponent has lifted significantly in recent months.

US: Feb durable goods orders (advance) rose 1.8% in Jan. However, nondefense capital goods excluding aircraft – a proxy for business investment – fell 0.4% ending the positive run in recent months.  Mar flash PMIs are released, manufacturing in a cyclical upswing printing 54.2 in Feb. A busy Fedspeak day involves Dudley in New York with media Q&A, Kaplan on the outlook and policy in Chicago, Bullard at the Economic Club of Memphis, and Evans gives opening remarks on the second day of the education themed Fed conference."

Key notes from the US session

• House GOP leaders postpone vote on healthcare bill - BBG
• AUD/USD Intermarket: iron ore correlation a negative risk on the week
• Obama: America is stronger because of the Affordable Care Act
• I expect "three or maybe even more" interest rate increases this year - Fed's Williams
• Gold back in the red on increased risk appetite
• US: Strong reading in New Home sales in February - Wells Fargo
• London police name attacker as Khalid Masood - RTRS
• Suspected terrorist arrested in Belgian city of Antwerp - The Independent
• U.S. economy in a snaphot - New York Fed