FOREX: Markets Wary of Potential Triggers for Further Volatility
Apr-04 09:06
- Another day of outsized volatility for asset markets, as the ramifications of Trump's tariff regime continue to reverberate through prices. Asia-Pac equities slipped sharply after the negative Wall Street close, with Japan's Nikkei 225 shedding near 3% and spilling over into the European open. Continental equities are off another 1.5 - 3.0%, with Spanish and Italian equities bearing the brunt.
- For currencies, this is dragging growth-proxies and pressing AUD/USD to new pullback lows. The pair is now within range of 0.6187 support, clearance below which opens the bear trigger at 0.6088.
- There remain two key risks to currency markets at this juncture: a further leg lower for global equity sentiment, or a rebounding dollar.
- Firstly, the Russell 2000 Index closed over 20% below the late '24 high yesterday, thereby entering a bear market - the Stoxx 600 is only 9% off the recent high - meaning a catch-lower in European stocks could further undermine sentiment.
- Secondly, the USD Index is bouncing, recovering over 1% off the lows. The drivers for a potential extension of the rally could lie in both today's NFP report as well as the appearance from Fed's Powell. Should the Fed Chair stress the importance of the inflation mandate over-and-above unpredictable near-term growth pressures, the USD could be squeezed higher still, and provide the next trigger for intraday vols.
- Markets expect gains of 140k for headline payrolls today, with the unemployment rate unchanged at 4.1%. Average hourly earnings are expected to keep pace with last month, raising the focus on unrounded figures.
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MNI: EUROZONE FINAL FEB SERVICES PMI 50.6 (FLASH: 50.7); JAN 51.3
Mar-05 09:00
- MNI: EUROZONE FINAL FEB SERVICES PMI 50.6 (FLASH: 50.7); JAN 51.3
- MNI: EUROZONE FINAL FEB COMPOSITE PMI 50.2 (FLASH: 50.2); JAN 50.2
BOBL TECHS: (M5) Pierces Support
Mar-05 08:56
- RES 4: 119.040 High Feb 28 and a reversal trigger
- RES 3: 118.950 High Mar 3
- RES 2: 118.310 Low Mar 3
- RES 1: 118.090 Intraday high
- PRICE: 117.870 @ 08:40 GMT Mar 5
- SUP 1: 117.650 Intraday low
- SUP 2: 117.600 Round number support
- SUP 3: 117.490 2.00 proj of the minor Feb 28 - Mar 3 - 4 price swing
- SUP 4: 117.318 2.236 proj of the minor Feb 28 - Mar 3 - 4 price swing
Bobl futures are trading sharply lower this morning. The contract has gapped down and price action is likely to remain volatile near-term. A key short-term support at 117.850, the Feb 20 low, has been pierced. This undermines a recent bullish theme. A continuation lower would signal scope for an extension towards the 117.600 handle. On the upside, key short-term resistance has been defined at 119.040, the Feb 28 high.
MNI: GERMANY FINAL FEB SERVICES PMI 51.1 (FLASH: 52.2); JAN 52.5
Mar-05 08:55
- MNI: GERMANY FINAL FEB SERVICES PMI 51.1 (FLASH: 52.2); JAN 52.5
- MNI: GERMANY FINAL FEB COMPOSITE PMI 50.4 (FLASH: 51.0); JAN 50.5
