- ADP employment report predicts loss of 742,000 private sector jobs in March
- ISM index rises to 36.3 in March from 35.8 in February, slightly firmer than expectations
- US pending home sales rise 2.1% in February, stronger than forecasts
- US construction spending falls 0.9% in February, better than expected
- China’s Hu meets Obama at G-20; no discussion of reserve currency; US spokesman
- US auto sales weak, but better than expected
- China will not block US seeking UN sanctions if N. Korea launches missile
- US equities rise 1.7%; Oil closes at $48.35, down $1.31
EUR/USD range-traded in New York, retracing much of its overnight losses, reaching 1.3286 before slipping as low as 1.3189 in quiet afternoon trade. Markets were thin in London given the G-20-linked disturbances in the City and many were sidelined ahead of Thursday with its busy slate of event risks. The ECB, G-20 and FASB decision on mark-to-market accounting all could impact markets.
USD/JPY spent most of the US session below 99.00, dipping to 98.50 at midday amid reports that China will not block a US move to sanction North Korea if they launch their three-stage missile. Any efforts from China to restrain North Korea should be JPY supportive, given the region’s geography. The buck looks set to close below the 200-day average and the old highs at 98.85, so profit-taking is becoming a growing risk in USD/JPY.
Fears that the ECB will adoptsome form of quantitative ease as early as tomorrow weighed on EUR crosses. EUR/GBP fell to 0.9155, testing important support. Support is layered down to 0.9135. A break below that level would signal a medium-term top is in place.
