20 Mar: Markets on hold, waiting for the Fed, later today. UK CPI also due.

By | March 20, 2019

 

Tuesday has been mostly very quiet while waiting on today’s FOMC decision and we should probably expect much the same for most of Wednesday. The US$ remains under mild downside pressure (DXY; 96.37), as do US stocks, which headed mildly lower late in the day after a news headline appeared, suggesting that China is “walking back” any trade offers although this was later confused by another headline, stating that the trade talks are progressing towards their final stages.

The metals squeezed mildly higher, while WTI made a new 4 month high ($59.84), before retreating to settle pretty much unchanged on the day.

In terms of data, the German ZEW Economic Sentiment improved notably, to -3.6 in March, up from -13.4 and beat expectation of -11.0. The Current Situation however dropped to 11.1, down from 15.0 and missed expectation of 13.0. The Eurozone ZEW Economic Sentiment improved to -2.5, up from -16.6 and beat expectation of -15.1. Eurozone ZEW Current Situation also dropped to -6.6, down from -3.0.

The UK unemployment rate dropped to 3.9% in the three months to January, down from 4.0%, beating expectations of 4.0% and the lowest level since January 1975.

Wednesday is likely to be pretty quiet until we see the outcome of the FOMC Meeting (early Australia/NZ tomorrow) although before then we may see some minor activity following the NZ Current Account (exp $-3.6 bio), and the WBC Australian Leading Economic Index.  The UK CPI, PPI, RPI will be released (CPI; exp 0.5%mm. 1.8%yy) as will the German PPI (exp 0.2%mm, 2.9%yy )but the main action will come via the FOMC outcome. No changes to policy are expected but the Fed seem to be increasingly cautious as to their outlook and if the growth projections are pulled lower then we might expect a softer US$ and yields.

Economic data highlights will include:

Wed: NZ Q4 Current Account, Australian WBC Leading Index, RBA’s Bullock- Speech, Japan Coincident Index, UK CPI, PPI, RPI, CBI Distributive Trade Survey, German PPI, FOMC Meeting/IR Decision/Projections

Market moves, in brief:

FX: DXY 96.37 (-0.15%)

Bonds: US10Y; 2.615% (+0.25%), German 10Y; 0.102% (+2.5%), UK; 10Y 1.191% (-0.10%), Australian; 10Y 1.945% (-2.43%), NZ; 10Y 2.055% (-1.2%, China; 10Y 3.164% (+0.04%)

Stock Indices: DJI; -0.1%, S+P;+ 0.01%, NASDAQ;- 0.12%, EUStoxx50; +0.16%, FTSE100;+0.34%, Shanghai Composite; -0.18%

Metals: Gold 1306 oz (+0.23%), Silver 15.37 oz (+0.15 %), Copper 2.62 lb (+0.24%), Iron Ore 86.23 pt(-0.06%)

CURRENCIES
EURUSD: 1.1353
Res  1.1360  1.1390  1.1420
Sup  1.1325  1.1270  1.1300
USDJPY: 111.36
Res  111.60  111.90  112.15
Sup  111.25  111.00  110.75
GBPUSD: 1.3276
Res  1.3300  1.3350  1.3390
Sup  1.3220  1.3180  1.3130
USDCHF: 0.9991
Res  1.0035  1.0085  1.0125
Sup  0.9970  0.9925  0.9885
AUDUSD: 0.7089
Res  0.7120  0.7140  0.7160
Sup  0.7070  0.7050  0.7030
NZDUSD: 0.6855
Res  0.6875  0.6900  0.6940
Sup  0.6830  0.6805  0.6785
INDICES / COMMODITIES
S&P.fs: 2835
Res  2840.00  2850.00  2860.00
Sup  2825.00  2815.00  2800.00
DJ30.fs: 25902
Res  25990.00  26145.00  26250.00
Sup  25800.00  25670.00  25480.00
SPI200.fs: 6182
Res  6210  6225  6245
Sup  6155  6170  6130
XAUUSD: 1306
Res  1310.00  1315.00  1320.00
Sup  1300.00  1295.00  1290.00
XAGUSD: 15.37
Res  15.45  15.55  15.70
Sup  15.25  15.10  14.95
WTI.fs: 59.17
Res  59.50  60.00  60.85
Sup  58.70  58.00  57.35