Dollar consolidates weekly gains, NOK and CAD buck trend in G10, AUD and JPY underperform. RUB and BRL excel in EM, intervention lifts TRY from record lows. 2y UST steady at 3.96%, 10y UST on 200dma (4.23%), US HY credit tightens to 314bp. Oil prices bid after US tightens sanctions on Iran, OPEC+ plans new supply cut to compensate for overproduction.
Day ahead: Fed speakers Goolsbee, Williams. ECB’s Escriva. Euro consumer confidence, Bundesrat votes on fiscal package. Canada retail sales. Chile CB f/c to keep rates on hold at 5.0%.
Japan CPI slowed to 3.7% yoy in February from 4.0% in January. Foreign investors bought ¥3.4tn ($22.9bn) of JGBs for week ending 14 March, second largest on record, sold ¥1.8tn ($12.2bn) Japanese stocks (4th largest since Covid).
Nikkei -0.2%, EUR 10y IRS -1bp at 2.65%, Brent crude +0.2% at $72.2/b, Gold -0.3% $3,032/oz.
EUR/USD: 1.0820 - 1.0859 overnight range. March rally pauses but as spot exits overbought territory, will buyers emerge? PMIs and IFO loom over the euro and Bunds next week. Support 1.0725, resistance 1.0885. Options: 1.0800 (€1.3bn), 1.0825-50 (€950m).
USD/JPY: 148.59 - 149.66 overnight range. Spot drifting sideways along 100dma (149.01) with modest bid tone. Sticky February CPI keeps suspense around another BoJ rate increase on the table. Support 148.50, resistance 150.50. EUR/JPY resistance 163.56.
GBP/USD: 1.2925 - 1.2972 overnight range. Cable offered for second day after failing to clear 1.30, virtually unchanged for the week. Support 1.2810, resistance 1.3000. GfK consumer confidence improved to -19in March. Can EUR/GBP close below 200dma (0.8381)?
AUD/USD: 0.6284 - 0.6306 overnight range. Spot defends 50dma (0.6288), vital technical support/ resistance line since January. Support 0.6230, resistance 0.6330. SGX iron ore down 4% this week, diverges from copper (+1.6%). Aussie CPI, PMIs next week.
EU: 10y IRS down 9bp this week at 2.66%, longest stretch of receiving since end-February. Support 2.54%, resistance 2.75%. Lagarde repeats data dependent, meeting-by-meeting approach, uncertainty elevated. IG weekly debt sales slow to €26.4bn.
US: 10y IRS down 7bp this week at 3.83%, at risk of deeper retracement if 200dma (3.77%) gives way. Support 3.74%, resistance 3.92%. HY spread tightens to314bp. Target and Citi main IG issuers yesterday, 22 borrowers sold $33bn primary debt this week.
UK: 10y IRS +3bp this week at 4.16%, Gilts (+4bp) underperform Bunds and USTs (both -6bp). Support 4.05%, resistance 4.23%. BoE 8-1 split (Dhingra lone dissenter) driven by rising uncertainty. SG economic maintain view of cuts in May, August, November.
