- UK March CPI rose 3.4% against a forecast of 3.2%
- Greek/German 10-yr govt. bond yield spread widens to 483bps, new life time high – Tradeweb
- German D/FinMin: any Greek aid would come in form of pooled credits, no plan to buy Greek bonds
- FX not expected to play a prominent role at G7 meeting
- ECB-EZ S/a Current Account Balance -3.9 bln Euros Feb vs. Balance -1.7 bln Jan
- Swedish c/b keeps key interest rate unchanged at 0.25%
- India”s c/b lifts Repo Rate, Reverse Repo Rate and Cash Reserve Ratio by 25bps
- UK Regulator to start formal Goldman Sachs investigation
- Germany ZEW Expectations Rise sharply in April, First Jump Since Sep April 53.0 fro March reading 44.5
- IMF Chief Economist: Lending bail-out money to Greece at high rates would make recovery impossible
- Greek 13-week T-bill auction 3.65% bid/cover ratio 4.6
- EU commission says a lot of work on the Greek plan has been carried out already
- Talks on the Greek aid plan start on Wednesday and should take between 2-3 weeks – EU Commission
- BNY Mellon Q1 earnings 46 cents vs. 28 cents
[Theme] Asia was not interested in the moderate gains on Wall Street after spending Friday and Monday in full risk off mode. Early Europe continued in this vein (as they do) selling EUR/USD and GBP/USD first off before strong bounces in both. Whilst strong data helped, short-covering appears to be the main thing at play here with positioning all wrong after NY basically ignored Goldman Sachs woes preferring the glass is half full perspective.
EUR/USD closed in NY at 1.3488 and struggled to rally in Asia with IB’s smacking the pair lower on the initial attempt above 1.3500. Asia basically gave up then and early Europe sold once more with the pair hitting an intraday low of 1.3449. The move was short lived when a run of news/data (mostly good) saw the pair rebound sharply but once above 1.3500 it has been a struggle to make further headway. Intraday range 1.3449-1.3522; last at 1.3503.
USD/JPY saw some dollar buying at the fix in Tokyo but once the demand was sated went back into drift mode. in Europe after some initial heaviness witnessed some strong buying from the leveraged community and climbed back above 92.80. The pair pushed onto 92.90 and holds just below. Intraday range 92.39-92.90; last at 92.88.
GBP/USD witnessed mostly sideways in Asia but was sold off in early Europe (again) but ran into strong short covering interest around 1.5300. When the pair started to rally mid morning in London the pair got up a real head of steam. Helping was some big stops triggered in EUR/GBP, a higher than expected CPI reading and general short covering in a market that is taking far to much notice of opinion polls. Throw into the mix talk of M&A activity. Intraday range 1.5290-1.5435; last at 1.5410.
AUD/USD gained a bid handle in Asia following the hawkish RBA minutes. Despite being dragged lower in early Europe (on the back of a sliding EUR/USD and GBP/USD) the pair quickly regained its poise and has continued its climb higher although the going has been rather tough above 0.9300. Players suggest the market is long a lot of option gamma around 0.9300 even. Intraday range 0.9240-0.9314; last at 0.9313.
Stocks China and Japan flat, H.K. up 1.0%. European bourses mostly up between 0.8-1.2%. Gold up $7.50 from NY close.
BOC rate announcement @ 1300GMT.