What happened across the Asia session?
Two data releases from the Asian session stand out.
The Overseas Trade Index for New Zealand has shown an increase of 1.8% in contrast to the forecasted figure of -1.7% and the previous quarter’s figure of -3.9%.
However, the data for Building Approvals in Australia has shown a negative momentum, with a decrease of 27.6% (expected -7.1%, previous 15.3%) on a monthly basis.
What does it mean for Europe and US Sessions?
The Euro could outperform other major currencies if its CPI y/y data exceeds expectations. Based on recent data releases, the AUD is the best tag to go long the shared currency.
The Dollar Index (DXY) Update
Key news events today
Unemployment Claims
What can we expect from DXY today?
The US Unemployment Claims are expected to slightly increase from last week’s 192,000 figure, with a forecasted number of 196,000. A significantly higher number could negatively impact the US dollar since the strong labour market partly underpins the rate hike trajectory.
Central Bank Notes:
- The Committee has raised the federal funds rate target range to 4.5-4.75% and plans to continue increasing it to return inflation to 2%
- The Committee will monitor incoming information and adjust the stance of monetary policy as appropriate to achieve its goals
- A majority vote from the Committee supported the decision to raise the target range
- Next meeting is on 23 March 2023
Next 24 Hours Bias
Weak Bearish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
The lower-than-expected Australian CPI figure could indicate that inflationary pressures in Australia are starting to ease. This could reduce demand for safe-haven assets, such as gold, as investors become more confident in the economy.
Next 24 Hours Bias
Bearish
The Euro (EUR)
Key news events today
CPI Flash Estimate y/y
Core CPI Flash Estimate y/y
What can we expect from EUR today?
The upcoming CPI Flash Estimate y/y data release for EUR is forecasted to be 8.3%, which is lower than the previous value of 8.6%. The Core CPI variant is expected to remain at 5.3%. These figures suggest a potential decline in the inflation rate in the Eurozone, while the underlying inflationary pressures are expected to remain stable.
Central Bank Notes:
- Main Refinancing Rate is currently at 3.00%
- ECB Governing Council to continue raising interest rates and reducing holdings of securities
- Future policy decisions to be data-dependent
- Next meeting on 16 March 2023
Next 24 Hours Bias
Weak Bearish
The Swiss Franc (CHF)
Key news events today
No major news events.
What can we expect from CHF today?
The latest data on Swiss retail sales show a year-on-year decline of 2.2%, in line with expectations and a slight improvement from the previous figure of -3.0%. Meanwhile, the Swiss PMI came in at 48.9, missing forecasts of 50.4 and lower than the last reading of 49.3. These data indicate ongoing challenges for the Swiss economy and may pressure CHF in the short term.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
BoE Governor indicated that it is not urgent to boost interest rates beyond the current rate of 4.00%. The Bank of England anticipates a significant decrease in inflation this year. These developments are likely to weaken GBP against other major currencies.
Central Bank Notes:
- MPC voted to increase Bank Rate by 0.5 percentage points to 4%
- Near-term data developments are crucial in assessing how quickly external and domestic inflationary pressures will abate
- MPC’s updated projections show CPI inflation falling back sharply from its current level
- Next meeting on 23 March 2023
Next 24 Hours Bias
Bearish
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
The impact of the latest decrease in Crude Oil Inventories (actual 1.2m bbl, expected 1.7m bbl, previous 7.6m bbl) on the CAD is likely to be positive since the oil price heavily influences its value.
Central Bank Notes:
- Increased rates to 4.50%; indicated pause of future rate hikes
- Inflation in Canada is projected to drop to around 3% in the middle of 2023
- Goal is to reach the 2% inflation target by 2024
- Next meeting on 8 March 2023
Next 24 Hours Bias
Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Crude Oil Inventories increased by 1.2 million barrels (expected 1.7 million barrels), a significant drop from the previous 7.6 million barrels of excess. This indicates a potential oil price increase based on the discrepancy.
Next 24 Hours Bias
Bullish
