Recap from March 6th to March 12th
Main catalyst last week was the positive NFP number and lower unemployment rate, the wage growth also improved from last time. However, USD had already been largely bought off from the beginning of the week, and we only saw USD weakness after the NFP as market still focused on the lower than expected wage growth.
Oil dropped below $50 per barrel was also an notable event as this is the significant sign of weakness into the oil market. The battle between OPEC and Shale Producers is on and we had another large built up in the Crude Oil Inventories.
RBA kept the rate unchanged with similar statement while ECB also kept the rate unchanged but came out with a less dovish statement. It also turned out that ECB had discussed the possibility of rate hike after the QE; something Draghi tried to brush off during the official conference a day before.
This week March 13th to March 18th
The main event this week will be the FOMC meeting on Wednesday which all eyes will be watching to see whether FED raise interest rate or not. The possibility for March rate hike has now priced in. A hike will most likely see USD spike initially and possibility retrace. An unchanged decision will most likely see large drop in USD.
BOJ also will release Monetary Policy statement and rate decision this week. The rate is expected to be unchanged and the Monetary statement will be the main focus.
BOE will also release Monetary Policy statement and rate decision. Rate is also expected to be unchanged, especially ahead of Triggering of Article 50 which rumours have it that PM May will trigger it soon on Tuesday, that is this Tuesday.
Another main catalysts are Dutch election on Wednesday and SNB rate decision as well.
For EUR
EUR has gained strength ever since the 2% headline inflation weeks ago and the expectation of a less dovish ECB. Last week the rate hike talk from ECB has given it the last push ahead of weekend. This week the Dutch election will be the main catalyst to either push it higher or sink it down.
Because of the less dovish central bank, we’re also less bearish in EUR. However, it is still a bearish currency especially against stronger dollar and aussie.
For USD
The Fed is expected to hike this week and the last piece of datas last Friday came out as expected, strong and positive. There isn’t much roadblock for the bullish USD, however, understand that market is always ups and downs, so the buying rumours and selling fact effect should be here this week and the possibility of USD further weakness is possible.
As intraday trade, you should definitely go with the flow of the day and buy/sell USD.
As swing trade, USD is still recommended for buy and any dips will be attractive to buy more.
For GBP
If the article 50 is triggered this week, we should see further GBP weakness. BOE is expected to keep rate unchanged but the monetary statement could be more dovish as the recent datas have been quiet disappointing for UK.
For CAD
The significant oil weakness and the consecutive large builds in Crudes are the biggest risk for CAD now. BOC is still dovish regardless of continuous positive datas of GDP, inflations and employments.
As long as BOC maintains its dovish stance, and the oil market continues to drop while Crude still builds up every week, we should expect further CAD weakness.
For AUD
A retracement in commodity prices and oil market weakness have dropped AUD last week alone with some risk off sentiment, however, the hawkish RBA is the benchmark of our fundamental bullish stance. The fundamental datas have also kept grounds, while the demands from China continues.
For NZD
The dovish RBNZ with the negative GDT price last week had continued to drop NZD to a new low. It is still a bearish currency due to the dovish central bank, however, we’re near the major supports in many NZD pairs and should see some recovery very soon.
For JPY
The rate decision and monetary policy are expected to be unchanged for this week’s BOJ meeting, the only surprise should be an unexpected cut as the inflation datas are still way below the target. However, because of the major catalysts from U.S Fed, Euro election and UK Brexit, safe heaven effect might be large for this week to see some supports into JPY.
For CHF
SNB is expected to be a non event but as mentioned in JPY, safe heaven effect might be large for CHF as well.
Current Central Banks Positions
Hawkish
FED
RBA
Neutral
ECB
BOE
Dovish
BOC
RBNZ
SNB
BOJ
Current Bank Rates
NZD > AUD > USD > CAD > GBP > EUR > JPY > CHF
10 yrs Bond Yields
NZD 3.395
AUD 2.929
USD 2.565
CAD 1.811
UK 1.202
EUR 0.447
JPY 0.079
CHF 0.019
Recap from March 6th to March 12th
Main catalyst last week was the positive NFP number and lower unemployment rate, the wage growth also improved from last time. However, USD had already been largely bought off from the beginning of the week, and we only saw USD weakness after the NFP as market still focused on the lower than expected wage growth.
Oil dropped below $50 per barrel was also an notable event as this is the significant sign of weakness into the oil market. The battle between OPEC and Shale Producers is on and we had another large built up in the Crude Oil Inventories.
RBA kept the rate unchanged with similar statement while ECB also kept the rate unchanged but came out with a less dovish statement. It also turned out that ECB had discussed the possibility of rate hike after the QE; something Draghi tried to brush off during the official conference a day before.
This week March 13th to March 18th
The main event this week will be the FOMC meeting on Wednesday which all eyes will be watching to see whether FED raise interest rate or not. The possibility for March rate hike has now priced in. A hike will most likely see USD spike initially and possibility retrace. An unchanged decision will most likely see large drop in USD.
BOJ also will release Monetary Policy statement and rate decision this week. The rate is expected to be unchanged and the Monetary statement will be the main focus.
BOE will also release Monetary Policy statement and rate decision. Rate is also expected to be unchanged, especially ahead of Triggering of Article 50 which rumours have it that PM May will trigger it soon on Tuesday, that is this Tuesday.
Another main catalysts are Dutch election on Wednesday and SNB rate decision as well.
For EUR
EUR has gained strength ever since the 2% headline inflation weeks ago and the expectation of a less dovish ECB. Last week the rate hike talk from ECB has given it the last push ahead of weekend. This week the Dutch election will be the main catalyst to either push it higher or sink it down.
Because of the less dovish central bank, we’re also less bearish in EUR. However, it is still a bearish currency especially against stronger dollar and aussie.
For USD
The Fed is expected to hike this week and the last piece of datas last Friday came out as expected, strong and positive. There isn’t much roadblock for the bullish USD, however, understand that market is always ups and downs, so the buying rumours and selling fact effect should be here this week and the possibility of USD further weakness is possible.
As intraday trade, you should definitely go with the flow of the day and buy/sell USD.
As swing trade, USD is still recommended for buy and any dips will be attractive to buy more.
For GBP
If the article 50 is triggered this week, we should see further GBP weakness. BOE is expected to keep rate unchanged but the monetary statement could be more dovish as the recent datas have been quiet disappointing for UK.
For CAD
The significant oil weakness and the consecutive large builds in Crudes are the biggest risk for CAD now. BOC is still dovish regardless of continuous positive datas of GDP, inflations and employments.
As long as BOC maintains its dovish stance, and the oil market continues to drop while Crude still builds up every week, we should expect further CAD weakness.
For AUD
A retracement in commodity prices and oil market weakness have dropped AUD last week alone with some risk off sentiment, however, the hawkish RBA is the benchmark of our fundamental bullish stance. The fundamental datas have also kept grounds, while the demands from China continues.
For NZD
The dovish RBNZ with the negative GDT price last week had continued to drop NZD to a new low. It is still a bearish currency due to the dovish central bank, however, we’re near the major supports in many NZD pairs and should see some recovery very soon.
For JPY
The rate decision and monetary policy are expected to be unchanged for this week’s BOJ meeting, the only surprise should be an unexpected cut as the inflation datas are still way below the target. However, because of the major catalysts from U.S Fed, Euro election and UK Brexit, safe heaven effect might be large for this week to see some supports into JPY.
For CHF
SNB is expected to be a non event but as mentioned in JPY, safe heaven effect might be large for CHF as well.
Current Central Banks Positions
Hawkish
FED
RBA
Neutral
ECB
BOE
Dovish
BOC
RBNZ
SNB
BOJ
Current Bank Rates
NZD > AUD > USD > CAD > GBP > EUR > JPY > CHF
10 yrs Bond Yields
NZD 3.395
AUD 2.929
USD 2.565
CAD 1.811
UK 1.202
EUR 0.447
JPY 0.079
CHF 0.019