FX Market Update 2-4

Market Briefs
• China imposes additional tariffs in response to U.S. duties on steel, aluminium
• Trump says DACA deal for young immigrants is off
• China March factory growth cools to 4-month low – Caixin PMI
• BoJ Tankan big mfg sentiment worsens for 1st time in 8 qtrs, non-mg in 6 qtrs
• BoJ Tankan big mfg DI +24, non-mfg +23, +25/+24 eyed, Dec +26/+25, Jun +20/+20
• JP March mfg PMI – final 53.1, flash 53.2, Feb 54.1, new orders growth off
• USD share of global ccy reserves lowest in 4 years – IMF, JPY/EUR/CNY up
• Speculators’ net short dollar bets fall from highest since 2011

Looking Ahead – Economic Data (GMT)
• No major econ events

Looking Ahead – Events, Auctions, Other Releases (GMT)
• 22:00 Fed’s Neel Kashkari speaks on the economy and monetary policy before a student town hall – Duluth, Minnesota
See North American Open for a detailed listing of US/NorAm releases, events.

Currency Summaries
JPY 
• USD/JPY, JPY crosses do little on Easter Monday, USD/JPY range 106.19-41
• Bids still eyed towards 106.00, offers from @106.50
• No large option expirations nearby today, small 105.50-95, 106.35-50
• Now descending 55-HMA 106.38 above, ascending 100-HMA 106.13 below
• Descending 55-DMA 107.57, trend low March 26 104.56
• EUR/JPY sideways too, Asia 130.84-131.13, Friday 130.60-131.04, quiet
• Ascending 200-HMA 132.03, bearish and risk down as long as spot below
• GBP/JPY buoyant with cable, Asia 148.92-149.48, 200/55-DMAs 148.52/150.40
• AUD/JPY 81.60-80, NZD/JPY 76.80-99, both sideways, little action
• Ex-IMF Shinohara – Japan may be forced into bilateral trade deal with US
• FY ‘18/19 USD/JPY average 109.66, big firm CAPEX +2.3%, small co -16.8%
• William Pesek – Trump’s weak USD may help Asia more than US – Nikkei
• CFTC – Spec dial back net short USD bets, JPY shorts off to 3.6k contracts

EUR
• EUR/USD, EUR complex unmoving, little action during Easter holidays
• EUR/JPY sideways with USD/JPY, 130.84-131.13, Friday 130.60-131.04, quiet
• Ascending 200-HMA 132.03, bearish and risk down as long as spot below
• EUR/GBP Asia range 0.8770-82, somewhat heavy still ahead of 0.8800
• EUR/CHF slightly better bid, Asia 1.1750-61, 1.1660 100-DMA underlying support

GBP 
• Cable gets small leg up in early Asia action, 1.4010 to 1.4056, some ease since
• Talk some spec buys but market thin, not so liquid
• GBP/USD support as ascending 55-DMA at 1.3984, descending 55-HMA 1.4043
• Market looks to settle with London closed today, lack of any fresh news

CHF 
• USD/CHF quiet in Asia, range 0.9539-50, sideways action likely to continue
• Liquidity low and Europe won’t return till Easter holidays over

AUD 
• AUD/USD opens 0.19% higher, touches a high of 0.7700 in early trading
• Official Cnina PMI released Sat beats expectations, but Caixin falls
• Range in Asia a quiet 0.7678/00 with Australia still closed for Easter
• Trend remains lower with 5,10 and 21 DMAs trending south
• Inability to close below 76.4 Fibo at 0.7651 so far is slowing the downtrend
• Long term trendline at 0.7599 also providing back-up support
• Friday’s tight 0.7672/0.7707 range to provide initial support and resistance

NZD 
• NZD/USD trades a tight 0.7227/38 range in Asia with NZ still closed
• Friday’s range of 0.7222/52 to provide initial support and resistance
• Longer term support seen at the 200 DMA at 0.7185
• Longer term resistance seen at last week’s high of 0.7304
• AUD/NZD range in Asia 1.0621/35, last at the highs

EQUITIES, OTHER ASSET MARKETS
• Nikkei up small as usually case first day of new fiscal year
• 21,403 early to 21,597 and, at 21,579, up 124 points or 0.6% on day
• AXJ mostly up – SSEC/KOSPI +0.2%, STI +0.1%, TWI outlier? Off 0.1%
• US Treasury 10s indicated 2.764% and JGB 10s 0.046%
• US-Japan respective 2s indicated 2.864% and -0.132%
• Dalian iron ore +1.6%, Tokyo rubber -1.5%, Shanghai rubber +0.5%

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