• Once again repatriation flows at Tokyo fix were the only highlight of a quiet session
• Reuters Tankan survey suggests increased optimism among Japanese corporates
• Increasing disquiet over European austerity measures
• Regional stockmarkets flat on the session

Once again there has been very little to report from a quiet Asian session. Some JPY-buying flows around the time of the Tokyo fixing saw the JPY crosses dip but the volumes were not large enough to cause any lingering effect and most currency pairs will end the session close to where they started.

USD/JPY opened around 90.40, fell to 90.15 when the JPY buying was at its strongest, but has since recovered most of these small losses. Corporate sell orders at 91.10/20 are still live but much of the selling has already been done and the pressure should ease by mid next week. Ranges: USD/JPY 90.15/45, EUR/JPY 123.66/124.28.

The AUD/USD had hoped for a more exciting day after a bullish close in NY above it’s recent consolidation range but the follow through has been negligible here today. Range: .9210/42.

Cable slipped from its NY closing level at 1.5320 when some GBP/JPY flows hit the market but it has managed to claw back most of those losses. There have been no major sterling-related announcements and order books are light 100 pips either side of the market. Ranges: Cable 1.5290/1.5324, EUR/GBP .8957/73

The EUR has again been quiet in Asia despite increasing reports of major differences of opinion between the EU partners. It looks a bit like Germany versus the rest. EUR/USD range 1.3713/42.

Markets: Nikkei -0.25%, Kospi -0.1%, HK +0.1%. Gold steady at $1123/oz.

• US PPI -0.6%; ex-food and energy +0.1% in February
• Greek finance ministry: EU failure to act will hurt euro
• Greek PM: Will not leave Eurozone
• Bernanke: US having no trouble selling debt
• US yields mixed; 2-year note rises 1 bp in yield to 0.92%; 10-yr falls 1 bp to 3.64%
• S&P closes higher for 7th straight session, at 18 month high of 1166
• Gold falls, ends session -$6 at $1119; oil up $1 to $82.73

The us session was characterized as one of backing and filling by the major currencies and continued rallies among the commodity pairs.

EUR/USD pulled back during the US session running into selling at the 1.3780 area once this morning and again later in the session. The first move to the downside triggered trailing stops below the 1.3760 level. We fell as low as 1.3727, holding above the afternoon lows posted ahead of the Fed yesterday at 1.3716. Late afternoon EUR/JPY sales helped knock the pair lower in its range and we end the day around 1.3740, a disappointment for those hoping for a bullish close above the 1.3800 level.

EUR/JPY approached the highs posted late last week above 125.00 but failed miserably and ended the day heavily on the defensive, around the 123.95 level. A break of 123.30 support would be very bad technical news for this cross.

Cable spent most of the US session consolidating after a moonshot in London on unalloyed short-covering. Upbeat UK employment data helped prompted GBP shorts to dash headlong for the exits. Bulls experienced their own moments of doubt and pain as prices pulled all the way back to 1.5275 to inflict pain on latecomers to the pound’s party. We end the day at 1.5325, well clear of the downtrend line in place since mid-January, a bullish sign.

AUD and CAD each for the bulk of the North American session. USD/CAD triggered a barrier at 1.0100 and slipped as low as 1.0075 before stabilizing. That’s the Loonie’s firmest level since the summer of 2008. AUD/USD rallied to 0.9350 and ends the day well supported at 0.9235. Australian sellers are seen in the 0.9250/60 area, traders report.

• Merkel: Euro facing biggest challenge ever.  No alternative to Greek savings programme.  No country can be left alone in euro zone.  On Greece, nothing can be done that goes against national law. In future need entry in the treaty that would make it possible as a last resort to exclude a country from euro zone if conditions not fulfilled “again and again over the long-term”
• Shanghai share index up 1.9% after Fed leaves policy stance unchanged
• Russia moves rouble floating trading band to 34.15 vs basket after buying $700 mln. Russian FinMin Kudrin says current exchange rate is justified. Given current oil prices , rouble trend is appreciation. Russia moves second time to move band to 34.10 after buying another $700 mln
• IMF’s Strauss Kahn says a bit worried countries not working together enough on ending crisis
• UK February claimant count -32,300, better than median forecast +8,ooo, biggest fall since November 1997
• Bank of England voted 9-0 in favour of leaving rates at 0.5%, QE at £200 bln in March - Minutes

Good morning for sterling, cable up at 1.5345 from early 1.5225, while EUR/GBP is down at .8985 from early .9057.  The trigger for the sterling gains was the better than expected jobs report.  Cable buying by a US investment bank in the 1.5210/15 area contained early weakness.  The BIS came in buying in 1.5220/25 area minutes before the release of the jobs data. How opportune. 

After the release it was basically a moonshot all the way to 1.5380 as sterling shorts were horribly squeezed, before we settled back slightly.

EUR/USD started round 1.3785 which is basically where we sit at writing.  It didn’t take long for the euro bulls to take out barrier option interest touted up at 1.3800 and we got to session high 1.3817 before slipping back.   More sovereign sell orders tipped at 1.3825/50 with further barrier option interest said to lie at 1.3850.   

The pairing did come under some pressure mid morning, reaching session low 1.3761, weighed down by heavy EUR/GBP selling in wake of UK jobs report.  Merkel’s comments probably played a little part there as well.   BIS was seen buying in low 1.3780’s.

USD/JPY at 90.50, unchanged on day.  Reports Japan Post Bank has been buying the pairing today, probably tied to purchases of US treasuries.  We remain stuck in well-defined 90-91 range at the present time.

• Not unexpectedy, the BoJ keeps rates at 0.1% and boosts it’s credit program to JPY20 trillion
• USD/JPY dipped after the anouncement in a case of buy the rumour, sell the fact
• RBA assistant governor says rates to rise further
• Way forward for Greece remains unclear as Germany would possibly be unable to ratify any bail-out package of any sort
• Regional stockmarkets gain over 1% on average

It was another brutally boring morning session in Asia with the EUR/USD trading for almost 6 hours in a 10 pip range. The BoJ announcement brought a few fresh flows into the market and this encouraged some small movements.

USD/JPY fell from 90.40 to 90.03 immediately after the announcement in what was a case of buy the rumour, sell the fact. But with 2-year JGB yields now at 4 year lows, USD/JPY and the JPY crosses found some willing dip buyers and USD/JPY has jumped to a new session high at 90.62. Unusually, this pair has been the most volatile during the local session.

AUD/USD jumped above .9200 in early trade as stop-loss buying in NZD/USD led the way but when AUD/NZD sellimng also materialised, the AUD/USD drifted back to its NY closing level. Range: .9174/.9209.

Cable and EUR were both relatively quiet although the GBP has given back some of its overnight gains on the cross. Sovereign sellers are expected in the EUR/USD at 1.3825/50 and this dissuaded local traders from being overly bullish. Ranges: EUR/USD 1.3763/86;  Cable  1.5220/60.

Markets: Nikkei +0.75%, HK +1.3%, Kospi +1.1%. Gold +5 to $1128/oz.

• S&P 500 closes well above 1150 old highs, up 9 points to 1159, highest since Oct ‘08
• Fed leaves policy unchanged; retains “extended period” language, upgrades economic outlook slightly; mortgage bond purchases to end on schedule at end of March
• S&P affirms Greece’s BBB+ rating, removes from credit watch, outlook still negative
• EU’s Rehn: Will review Greek situation in mid-May
• US Treasury: Unemployment to stay high for an extended period
• US Senate China currency bill takes shape, gains Republican backing
• US Treasury: China should move to more market-oriented forex regime
• BOE’s Bean: UK deficit unsustainable over medium-term, a factor behind GBP weakness
• US yields drop after Fed: 2-year note 0.91%, down 4 bp, 10-yr 3.65%, -5 bp

EUR/USD was boosted headed into New York trade by better than expected ZEW data and never looked back. It consolidated gains below 1.3730 before edging firmer at the 15:00 GMT fixing and finally racing higher (to 1.3771) after S&P affirmed Greece’s credit rating and removed it from watch for a downgrade.

We traded in choppy fashion in the run-up to the FOMC statement and slipping as low as 1.3716 just before the release and then soon racing to 1.3779 within moments. another dip, this time to 1.3730 was followed by a sprint to 1.3784 where we stalled ahead of rumored 1.3800 barriers. Technically, we closed above the downtrend in place since since December for the first time today.

Cable took off after the Fed, building on early gains on the heels of the Conservatives putting some distance between themselves and the ruling Labour party. Bearish comments on the pound from BOE member Bean did not prompt any selling from near session highs, a signal to GBP shorts to cover quick. Prices rocketed as high as 1.5259. Traders were badly burned on the day, having sold earlier after waves of M&A selling took the pound below 1.5000 in London early in the day.

USD/JPY eased slightly with US yields after the Fed but dips were limited on buying of JPY crosses like GBP/JPY and AUD/JPY as the era of cheap money was perpetuated by the Fed again today. Dips were limited to the 90.16 level in New York trade.

AUD/USD rallied to 0.9193 as risk trades performed strongly in New York afternoon trade. Whispers of options protection ahead of 0.9200 helped slow the advance. USD/CAD fell to its lowest levels since the summer of 2008 at 1.0137 today after triggering a 1.0150 barrier.

• German government spokesman: Government expects no decision on aid for Greece at EU summit next week
• German government source (anonymous, not spokesman): Should Greece aid be needed, German government is open to involvement of IMF
• German FinMin: Euro zone states would take coordinated action if one state in group faced bankruptcy
• Greek FinMin: Welcomes eurogroups decision on Greek aid.  Aid to be granted to Greece only should need arise. Will be granted on reasonable rates
• Swiss government raises 2010 GDP growth forecast to 1.4% from previous forecast of 0.7%
• Shanghai share index closes up 0.5%
• UK Treasury Chief Sec Byrne: EU has got judgement wrong over deficit
• Belgian FinMin: Belgium ready to participate in any Greek aid scheme. Aid scheme could involve bilateral loans or guarantees
• Euro zone February inflation confirmed at +0.3% m/m, +0.9% y/y
• ZEW March German economic sentiment index 44.5 vs 45.1 in February, better than expected 43.7

Well looks from all the rhetoric as though Greece is going to get its aid, if infact it needs it.  Can’t really fathom the details. Maybe its just me being slow. or maybe there aren’t any.

EUR/USD up at 1.3720 from early 1.3695. Early sell-off reached session low 1.3657 where sovereign purchases supported.  Slightly better than expected ZEW data (see above) also helped.   

Cable started around 1.5005 and fell to 1.4979, two  UK clearers and a German bank notable sellers.  Sovereign buy orders were tipped down at 1.4950/60 but we didn’t get that far. Sovereign buying is said to have surfaced around the lows.  Stops were tripped as we went through overnight high of 1.5071 on way to session high 1.5153, presently at 1.5140.  Another clearer (neither of those seen selling earlier) is said to have played a big part in getting the pairing through 1.5100.

Latest poll in Daily express shows Tories lead increasing. Maybe we might not get hung parliament after all.  Fingers crossed.

EUR/GBP down at .9062 from early .9095.  An early rally floundered at .9119.  The .9110/30 zone continues to provide formidable resistance.

USD/JPY up at 90.65 from early 90.10.  We’re stuck 90.00-91.00 range at the moment.  Fiscal year end repatriation flows capping the upside. Speculation BOJ will bring in further easing measures this week limiting downside.

• China again says level of CNY not to blame for trade surplus
• RBA minutes from last meeting suggest further rate rises in store
• Regional stockmarkets fall by around 0.25%
• Japanese corporates continue with JPY repatriation ahead of end-of-financial-year
• European finance ministers deliver no new plan, but say are ready when needed

USD/JPY has drifted lower throughout the session under the weight of further corporate repatriations. The pair opened at 90.45, triggered stops below 90.15 and has traded a 89.99/90.49 range.

The AUD/USD slipped immediately after the RBA minutes but once again has shown the ability to bounce back quickly. The spectre of further rate rises will have more dip-buyers out in force. Range: .9120/53

EUR/USD has again been under-inspiring in a 1.3660/98 range. The lack of anything concrete from the EU finance minister meeting did not affect the market here in Asia. Heavy stops said to be building below 1.3530 but that’s a long way away based on today’s price action.

GBP has again been the weakest of the majors with speculation that some of the big M&A stories like the Prudential/AIG deal are to blame. Cable range, 1.5042/71, EUR/GBP .9070/.9100

Markets: Nikkei -0.2%, HK -0.3%, Kospi flat. Gold slightly higher at $1110/oz.

• Empire State manufacturing index 22.9 in March from 24.9 in February
• US TIC data shows net outflow of $33.4 in January
• US industrial production rises 0.1% in February after 0.9% in January;  eighth straight rise; stronger than consensus for a 0.2% decline
• Trichet: Greek austerity package should be respected by rating agencies; collateral rules could be changed
• Eurogroup’s Juncker: Eurogroup discussing several options for Greece
• EU scolds UK on budget plans
• NAHB index falls 2 points to 15
• 130 congress people ask Treasury to label China a currency manipulator
• White House downplays China tensions
• S&P 500 virtually unchanged at 1150.5
• US yields drop 1 bp to 0.94% in 2-year maturity

Risk aversion was the early theme today as the growing rift between China and the US was cause for concern as was commentary from Moody’s on the vulnerabilities to the AAA sovereigns (US, UK Germany and France) over the medium-term.

EUR/USD fell for much of the US morning, weighed down by heavy sales from a Swiss bank, rumored to be approximately EUR 1 bln. Prices slipped below 1.3670 support late this morning which triggered a wave of stop-loss sell orders. Prices fell as low as 1.3639 moments after the 16:00 GMT fixing. We slowly recouped some lost gound in the afternoon, ending around 1.3675. Offers reside in the 1.3700 region on rebounds, traders say. Bids are eyed in the 1.3620/25 area.

GBP/USD retreated as low as 1.5021 with the Moody’s comments and M&A-related sales seen as a catalyst. More stops lie below the 1.5000 level, traders report.  1.5085 and 1.5120 are resistance levels on rebounds near-term.

USD/JPY was a victim of risk aversion, slipping as low as 90.36. EUR/JPY was a victim as well, falling to 123.32 after lots of stops were triggered after the move back below the pivotal 123.90/124.00 area. That area should cap rebounds in the near-term. The cross closes around 123.77.

AUD fell as low at 0.9096 on risk aversion but rebounded impressively in thin afternoon trade, ending around 0.9144.

• German government spokesman:  No political decisions to be made on Monday on euro zone aid for Greece.  Not talking about possible financing for any EMF.  Greece has not asked for aid, is working on its debt problems itself
• Japan MOF’s Noda: Hopes BOJ will take appropriate policy steps in view of economic situation
• Japan government upgrades economic assessment for first time since July 2009. Economy has been steadily picking up. Raises assessment on personal consumption, capex
• Shanghai share index down 1.2%, lowest close in 5 weeks
• Swiss February producer/import prices -0.3% m/m, -1.0% y/y
• Euro zone Q4 2009 employment -0.2% q/q, -2.0% y/y
• Japan FinMin Kan:  Yen relatively stable now. Concerns remain that euro’s woes could effect yen
• BOE’s Barker: Possible Uk may have a quarter when GDP falls, but no double dip. Recovery will be bumpy, fragile

Bad morning for sterling, cable down at 1.5045 from early 1.5160, while EUR/GBP is up at .9118 from early .9060.  The move comes with worries over a hung parliament exacerabated by weekend polls; warning from Moody’s re Uk’s AAA rating; downbeat comments from BOE’s Barker; and poor UK housing data from Rightmove,  the +0.1% m/m rise in March being the lowest recorded for the month.

Cable, and sterling in general, started out on the front foot however, cable fleetingly above 1.5200, EUR/GBP down to .9047.  Given the raft of poor news the move was a little baffling and sources cited decent cable buying from Eastern Europe.  Some also seemed to take solace in the Moody’s comments, but I couldn’t quite see that myself.

Talk UK clearer was an aggressive cable seller during the session, mutterings it was tied to Prudential’s purchase of AIA.

EUR/USD little easier, but not by much.  EUR/USD sits at 1.3724 having been as low as 1.3699 after stops tripped through 1.3720.  Comments from German spokesman and others re Greek aid have been duly noted (see above).  Talk of sovereign sell interest up at 1.3800 and again up at 1.3830/50 will be adding note of caution to euro bulls.

USD/JPY very marginally firmer, up at 90.70 from early 90.57.  The pairing remains fairly well underpinned ahead of  BOJ’s meeting later in the week.  Sell orders seen 90.80/00, stops just above there.

EUR/CHF has continued lower, presently down at 1.4533 from early 1.4560 as the SNB stays at home.

• EUR/JPY opened higher this morning on renewed Greece and BoJ speculation
• AUD/USD also gapped higher in thin early trade to trigger a .9200 barrier
• Mild risk aversion set in thereafter as regional bourses slipped around 1% lower
• Chinese Premier says CNY is not undervalued
• Signs appearing that China is becoming increasingly outspoken in its dealings with Washington
• More disappointing house-price data out of the UK
• Speculative market positioning report suggests market: long AUD, CAD, JPY; short EUR, GBP, NZD; flat USD, CHF

EUR/JPY gapped higher in the early interbank market, trading to 125.30 after closing in NY at 124.50. These gains have been given back amid the aforementioned mild risk aversion and the on-going repatriation by Japanese corporates. USD/JPY still sees a lot of corporate selling interest at 91.10/20 and EUR/JPY is also attracting offers from 125.50 to 126.50 from European-based Japanese corporates. Ranges: USD/JPY 90.56/80. EUR/JPY 124.44/125.30.

AUD/USD took out a barrier option at .9200, trading to a high of .9204 on interbank platforms, before settling back on the reports of increasing tension between China and the US regarding the level of the RMB. Fairly heavy stops ae reported below .9100 and particularly below .9060. Range: .9130/.9204.

EUR/USD moved higher early on the EUR/JPY and AUD/USD moves but the prospect of Sovereign offers above 1.3800 (particularly between 1.3825/50) dissuaded any bullish heroics and this pair also drifted lower throughout the session. Range: 1.3727/76.

Sterling was unaffected by the housing data and in fact managed to make some gains against the EUR and the AUD. Cable range: 1.5154/97.

Markets: Nikkei -0.1%, HK -1%, Kospi -1%. Gold steady at $1105/oz.

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