CIBC

FX Flows

Cross-play dominated the AU$, earlier move to 0.7519 then reversed back. Trade surplus for February narrowed to AU$7.46bn against economists’ forecast of AU$11.65bn. Those numbers had the AU$ landing at 0.74915. Activity slowed after that, Westpac’s Bill Evans brought forward RBA rate hike call to June. Support seen at 0.7475 and resistance 0.7550. Tomorrow, RBA will release semi-annual Financial Stability Review.

$YEN had some excitement but short-lived. It was bought up to 123.92 then returned to 123.47. Like the Aussie, action dried up. Two BoJ speakers, both defending easy monetary policy, nothing new. Most speculators are long $YEN, only the Japanese retail traders are short.

EUR$ firmed up little, thanks to cross play. Market is positioned short €AU$ and the move which started yesterday is likely to continue into European session.

Citi

European Open

FOMC minutes brought about some volatility in markets, although Citi Economics did not find anything materially new or surprising. USD continued to be bid in the NY session, although it was flat in Asia, G10 currencies kept to a tight range against the dollar, with the exception of AUD and NZD which saw notable losses. UST yields were down marginally in Asia. Oil prices and US equities continued their decline post European close. The former however, saw an uptick in Asia, while the latter was mostly flat. We note that AUD trade balance printed lower than expected today, at AUD 7457mn vs AUD 11650mn consensus.

Looking ahead, we note that the UN General Assembly is set to vote today on whether to suspend Russia from the Human rights council, while the EU debate on sanctions extends to today. USD will watch Fedspeak and initial jobless and continuing claims. EUR sees German IP and European retail sales datasets, in addition to ECBs minutes. CHF sees unemployment rate information, GBP sees Pill speak, while CAD will receive the government’s budget. MXN will see inflation prints alongside Banxico minutes. HUF will see trade balance and a one-week deposit rate decision, in which we are not expecting a hike. UYU sees a rate decision, in which markets expect a 75bps hike.

G10 FX

–USD continued to strengthen on the release of FOMC minutes, although it held flat in Asian trading. G10FX held a tight range around the dollar, with commodity linked currencies a tad in the red. Antipodean currencies were the only ones that saw notable moves with AUD at -0.47% and NZD at -0.32%.

–EMFX was little changed on the day, with THB the only mover at -0.3%, as it returns from holiday.

–Our etraders flag that volumes are sharply lower, led by EUR (-50% against recent averages). The flow in platforms is matching price action with AUD, NZD, CNH all struggling and net sold by all client types. JPY is outperforming a touch with our spot desk seeing some selling USDJPY out of Tokyo, though little else to warrant the move.