Bugün Federal Açık Piyasa Komitesi (FOMC) üyelerinin mevzuat reformu, risk yönetimi ve ekonomik görünümle ilgili açıklamaları takip edilecektir. Tüm bu açıklamaların piyasaları etkilemesi muhtemeldir.

Bugün Euro bölgesinden minör güven raporu bekleniyor. Euronun önümüzdeki saatlerde rakipler karşısında trendini devam ettirmesi muhtemeldir. Yarınki haberlerin bölge değerlerinde daha etkili olması söz konusu. Fakat yatırımcıların piyasa yönünü öğrenmek adına USD’ye dikkat etmeleri önerilir.

• Japan FinMin Noda – Size of first supplementary budget undecided, would like to avoid fresh bond issuance to fund it, welcomes BoJ loan relief plan – RTRS.

• Japan Feb c/a surplus Y1.641 trln, +3% y/y, Y1.7066 trln and +7.1% eyed.

• MoF March flow data – Japanese sold a net Y83.5 bln in foreign stocks, bought $2.6335 trln bonds, sold Y58.6 bln bills; foreigners bought Y1.1818 trln Japan stocks, Y498.7 bln bonds, sold Y2.3322 trln bills.

• Japan Mar corp bankruptcies -9.9% y/y, 1183 cases, debt involved -13% – TSR.

• Australia’s Griffin to sell power assets to Japanese firms, value $1.2 bln.

• Foreign CB US debt holdings +$2.151 bln to $3.406 trln April 6 week, Treasury holdings +$6.065 bln to $2.644 trln, agencies -$3.914 bln to $762.96 bln.

• Fed balance sheet liabilities grow to record $2.633 trln as of April 6.

• Americans to Fed: prices are too high – Reuters.

• Fed may act if supply fall stresses rates – Reuters.

• France FinMin Lagarde – Spain won’t need bail-out, no contagion – DowJones.

• France INSEE – Q2 GDP to slow to +0.4% from Q1 +0.6%.

• Australia Tsy Swan – Nixes ASX/SGX deal but open to “right deal” – Reuters.

Looking Ahead – Economic Data

• 05:45 CHF Mar jobless, 3.4% nsa, 3.3% sa eyed; last 3.6%, 3.4%.

• 06:00 GER Feb trade balance, E12.5 bln surplus eyed; last E11.8 bln surplus.

• 06:00 GER Feb exports/imports, +1.5/+0.8% m/m eyed; last -1.0/+2.3%.

• 06:45 FRA Feb budget ytd; last E13.4 bln deficit.

• 07:30 SEK Feb industrial production; last +4.1% m/m, +15.0% y/y.

• 07:30 SEK Feb new orders; last +12.1% m/m.

• 08:30 GBP Mar PPI – input,  +2.1% m/m, +12.5% y/y eyed; last +1.1%, +14.6%.

• 08:30 GBP Mar PPI – output, +0.6% m/m,  +5.1% y/y eyed; last +0.5%,  +5.3%.

• 08:30 GBP Mar PPI – core,   +0.3% m/m,  +2.9% y/y eyed; last +0.1%,  +3.1%.

Looking Ahead – Events, Other Releases

• N/A   BoJ monthly economic report.

• 05:00 Japan economy watchers’ survey.

• N/A   Informal EcoFin meeting in Budapest (till Saturday).

• 06:00 ECB Tumpel-Gugerell, Gonzalez-Paramo at Berlin German-Spanish forum.

• 10:45 Norway FinMin announces changes to rules governing sovereign wealth fund.

• N/A   Bretton Woods conference hosted by INET (till April 11).

• 13:00 CSIS seminar on Greek debt crisis in Washington, DC, various speakers.

• 15:00 Press briefings by various World Bank officials in Washington, DC.
  (See North American Open for a detailed listing of US/NorAm releases, events.)
   

Currency Summaries

USD/JPY and the JPY crosses moved higher in Asia after weakness overnight. Nervous offshore players sold risk and the whole JPY complex following another large quake in northern Japan. The complex had since bounced but no one really expected the JPY pairs to rally the way they did ahead of the weekend. Japanese importer demand for the Tokyo fix kicked things off. With the 10th (a day which usually sees large settlement demand) falling on Sunday, this was not all that surprising. Rather than fall back post-fix, USD/JPY and the crosses moved higher still, the crosses in the lead this time with two of the three Japanese mega-banks good buyers. Fresh moves into carry trades on widening interest rate differentials and taking off of previous hedges were cited. USD/JPY did top out well ahead of option and exporter offers between 85.50-80 at 85.39. The early low was 84.82. Large stops remain above 85.75 and 86.00. EUR/JPY, GBP/JPY, AUD/JPY and NZD/JPY rallied from 121.35-122.63, 138.41-139.58, 88.69-89.53 and 65.87-66.57 with AUD and EUR leading the way. All eased off later on profit-takes but remain better bid with the crosses holding just below recent highs

EUR/USD opened in Asia at 1.4300 after holding up well overnight despite somewhat less than expected hawkishness from ECB Pres Trichet. It edged down to 1.4292 before surging through stops above 1.4350 and 1.4400 to 1.4405 in the afternoon. Very good demand out of Tokyo for EUR/JPY helped as did a general risk-on mood on the stock front. Asian sovereign names bought the dip below 1.4250 overnight and have not been sellers despite talk of offers around 1.4350.

GBP/USD opened in Asia at 1.6322. After dipping to 1.6316 early, it has been bid since, trading up to 1.6390 alongside EUR/USD. GBP/JPY demand out of Tokyo helped, similar to demand seen in EUR/JPY from Japanese players. Moves higher on Asian bourses helped. EUR/GBP also rallied. Opening at 0.8762, it moved up from 0.8760 to 0.8788.

USD/CHF traded down on broad USD strength and despite the push up in USD/JPY, trading down from 0.9167 to 0.9105. EUR/CHF see-sawed between 1.3097-1.3137, up early and then back down.

AUD/USD opened in Asia at 1.0465 after making a solid recovery from 1.0412 overnight. Risk was sold then on news of another large earthquake in Japan. Japanese accounts and hedge funds aggressively bought AUD/JPY from early in the session, taking AUD/USD up from 1.0453 to 1.0496 just ahead of offers in the 1.0500-20 zone. Another push was seen in the afternoon and a fresh post-float high of 1.0520 seen. AUD/JPY traded up from 88.69 to 89.53, and could move higher still towards 100 let alone 90.00.

NZD/USD opened in Asia at 0.7789. It slipped to 0.7764 early on profit taking but rallied on broad based buying of the JPY crosses by Japanese players. NZD/USD climbed to 0.7825 in the afternoon. AUD/NZD traded a tight 1.3450-73 range.

FX Charting 

Other Asset Markets

The Nikkei opened small gap down and underwater at 9586.17. It proceeded to fall off further to 9536.68 before bouncing and in a very large way. The afternoon saw it as high as 9783.20. At 9742.83, the index is up 1.58% or 151.90 points on the day. Other bourses in Asia were initially higher (though to much smaller extents) before some fell off. The Shanghai Composite is up 0.31% and the Hang Seng up 0.57%. KOSPI is slightly in the red and Sensex down up 0.5% on the day.

JGBs traded flat before falling off later with futures in the lead. In cash, 5s were especially weak. Euroyen futures also traded heavy in low-volume trading. The yield on the benchmark 10-year issue is indicated at 1.325%, up from 1.305% at the close yesterday. The front futures contract trades 138.49, down 23 ticks after a 138.38-76 range. December Euroyen futures last traded at 99.660, down from yesterday’s 99.670 close.

Postscript – EEMEA FX

Summary/Outlook Apart from RUB, the EEMEA saw gains Thursday. ZAR and TRY were the star performers as risk sentiment improved further and carry plays dominated. Better than expected South Africa manufacturing data added to ZAR demand while higher CPI expectations (6.9%) helped TRY. Elsewhere, the ECB 25 bp hike was taken well and the CE3 all managed to close in the black. Hungary February output data beat the consensus with a 14.3% rise, up from 13.4% last. Positive budgets for the Czech Republic and Hungary and IMF and OECD approval also helped.

Looking Ahead Turkey output, Hungary trade data and Czech unemployment.

• ECB hikes by 25bp as expected
• BoE leaves rates unchanged, no move on QE, as expected
• US Weekly Jobless Claims 382k vs. 392k (revised from 388k), expected 385k
• US Weekly Continued Claims 3.723mln vs. 3.732mln (revised from 3.714mln), expected 3.70mln
• US Feb Consumer Credit +$7.62bln vs. +$4.45bln (revised from +$5.01bln), expected +$4.70bln; Revolving Credit -$2.71bln vs. -$3.91bln
• Canada Feb Building Permits +9.9% vs. -6.6% (revised from -5.1%), expected +1.0%
• Mexico Mar Consumer Prices +0.19% vs. +0.38%, expected +0.29%; Core +0.30% vs. +0.40%, expected +0.39%
• ECB’s Trichet: Monetary policy still very accommodative; Does not say rates are appropriate; Rate decision unanimous; Did not decide hike was first in a series; We are signaling we are extremely alert on second round effects
• Fed’s Lacker: Rate hikes before year-end “certainly possible”, inflation risks have picked up the last six months; Mortgage market can easily with stand substantial liquidation of Fed’s MBS holdings
• Portuguese request for aid likely to be made in next day or two, will be agreed before June 5 election (senior EU source)
• Japan experiences 7.1 earthquake and tsunami warning, risk aversion at London close until tsunami warning dropped 
• US government ran $830bln budget deficit in first 6 months of this fiscal year; Deficit estimated to be $113bln more than same time last year
• Fed bought $6.58bln 2015-2016 Treasuries, $18.97bln offered
• IMF sees oil price spikes as demand outstrips supply  

Looking Ahead – Economic Data

• JPY 23:50 Feb Current account (exp. JPY1.64trln)

Looking Ahead – Events, Other Releases

• JPY–:–  Cabinet Office releases economy watchers” survey for Mar

EUR/USD opened NYC 1.4275 a tad above European lows, and 55 pips below last night’s close. Portugal’s request to the EU for aid, slated to be as much as E90bn proved to be a drag on EUR/USD. ECB’s 25bp hike popped EUR 40 pips to 1.4315, back down to 1.4275 ahead of Trichet’s comments then 1.4325 highs on inflation rhetoric. Omission of the phrase “strong vigilance” and refusal to affirm this is the beginning of consecutive rate hikes pressured EUR/USD back down to 1.4243 lows but ABC buyers who faded both yesterday and today’s rallies bought the dip. Heavy EUR/JPY sales after news of another big Japanese earthquake/Tsunami forced the nadir (120.75 EUR/JPY low) Algo buying drove EUR/USD back up to afternoon highs of 1.4313 as WTC closed $110.30, EUR/USD 1.4305, stocks -0.13/0.16%

USD/JPY opened in NY at 85.18. EUR/JPY turned higher after the 25bp ECB hike and seemingly hawkish comments from Trichet. EUR/JPY hit a 122.11 high before models turned on it. Commercial USD sellers capped the price action at 85.41equivalent high. Risk was weighed down by a weak NYSE open passing over solid Canada housing data and drop in US jobless claims. Spot traded sideways until news broke of a 7.1 earthquake (downgraded from 7.4 initial report ) in Northern Japan along with a tsunami warning. USD/JPY plowed through real money bids between 84.90 and 84.50 hitting an 84.62 low by the London close. EUR/JPY rushed down to bids near yesterday’s open of 120.76 (120.73 was the low) rebounding after the tsunami warning was dropped. The IMF warned about possible supply shocks in oil and crude was juiced by talk of Kaddafi advances. EUR/JPY closed 121.57 with WTI closing above $110/bbl and generally bearish JPY sentiment still in place. USD/JPY closed at 85.00 with offers stacked from 85.40 to 86.00, bids 84.60/50, and stops above 86.00.

GBP/USD  Early European action saw a continued slide to a spike low of 1.6260 and then a pre-MPC rebound to around 1.6340, with EUR/GBP dripping to 0.8730. No surprises from the BoE policy meeting with the key rate held at 0.5%. That, and the ECB rate hike, eventually pushed GBP/USD down to 1.6280 and the cross up to near 0.8780. After that it was range trading. EUR/GBP fell back below 0.8750 but drift up to finish in the 0.8760-0.8770 area. GBP/USD chopped back and forth around a 1.6310 center point. The Japan quake news provided a little intraday volatility, but not real directional impact. The cable rebound from 1.6260 has put something akin to a hanging-man candle on the daily chart, which could end up being a bearish development. Today’s low was higher than Wednesday’s, but the intraday highs have been descending. With the March peak close above the market, there’s bound to be the weight of that resistance weighing on the market. If we don’t see a quick upside break the hanging-man will likely end up being a reversal precursor.

USD/CHF Decent US Claims data gave USD/CHF a brief boost from 0.9170 to 0.9201 where the morning and session high ran into offers tied to the 10-day MA there. News of another major quake and possible tsunami in Japan hurt risk and favored the Franc late in the NorAm morning with a dip to a session low of 0.9153. That was fleeting due to news the tsunami warning had been canceled. EUR/CHF tried to recover from pre-ECB profit-taking losses after Trichet made good on his rate hike promise but left some wondering when the next hike will come & many there will be this year. Between that uncertainty, Portugal’s bailout request, today’s Japanese quake scare and some Swiss banks predicting the SNB will raise rates at their June meeting, EUR/CHF spent the shank of the session fumbling just above the week’s lows and 10-day MA support in the 1.3055-67 range. The cross is correcting overbought daily oscillator readings as well. USD/CHF is heavy and will be heavier still if bids by 0.9125 are cleared out. Swiss Mar Jobless Rate, due out Friday, is expected at a s.a. 3.3% vs 3.4% last. ECB & SNB tightening timelines are key issues.   

USD/CAD  opened Noram marts by 0.9595 as firm oil prices and firm bids in CAD/JPY drove USD/CAD off 0.9625 overnight highs. CAD/JPY ran to 89.05 Noram highs in early trade and strong Cdn Building permits (+9.9% vs 1.0 f/c)drove  USD/CAD to 0.9570 lows. Decent Corporate bids emerged there, a repeat of yesterday’s price action, then news of a 7.4 Richter scale ‘quake hitting Japan’s north east coast and Tsunami warnings of 2 meter waves slammed CAD/JPY down to 87.95. Revised readings of “7.1″ and “1m waves” alleviated the pressure, CAD/JPY rebounded to 88.65 at the close, USD/CAD 0.9585/90 with WTC closing $110.30 (+$1.47) on M.E. turmoil. TSX -0.67%.

AUD/USD Dealers were chopped up today amidst rate hikes and headlines. AUD/USD opened NY at 1.0485 with markets already selling USD into the session. A strong CAD building permits number and drop in initial claims shifted risk appetite. Spot moved up to a 1.0508 high after the NYSE open. Spot was helped by EUR/AUD selling after a 25bp ECB rate hike and seemingly hawkish Trichet comments. Aussie was slammed after 1.0500 option expiries and news of an earthquake in Japan. AUD/JPY slipped to a 88.08 low by the London close as funds ran for cover. Real money was also an Aussie seller at the fix. AUD/JPY rebounded once a tsunami warning was retracted. WTI closed above $110/bbl after the IMF warned about supply shocks in the future and talk that Kadhafi forces are making advances to the East. EUR/AUD closed above the Ichimoku cloud at 1.3630. Sentiment is for a bounce in EUR/AUD and risk appetite but the conviction is less evident. A stronger CAD and BRL and higher oil prices are Aussie supportive as markets consider a more hawkish RBA. Offers above 1.0500 are light though overbought conditions flash warnings.

NZD/USD  kiwi opened in NY at 0.7777 and bounced to a 0.7801 high after hawkish Trichet headlines, solid US initial claims, and a jump in Canada building permits. Model and macro NZD/CHF buying and EUR/NZD selling helped support spot through the NYSE open. The focus turned to NZD/JPY by midmorning as news broke that a 7.4 (revised to 7.1) quake hit Northern Japan. Risk rolled off into the London closed sending the cross to its 65.43 low. NZD/JPY and risk appetite recovered after a tsunami warning ended. NZD/JPY closed 66.00 and NZD/USD 0.7782. Helped by a new high in crude oil after IMF comments about possible shortages, EUR/NZD rebounded from 1.8298 to settle 1.8371. AUD/NZD rolled over at 1.3490 closing 1.3420. CRB +0.28%. Risk appetite is quietly positive heading into overnight session but traders were chopped up today. Failure to break to a new Kiwi high may be telling. Real money has switched to a modest seller recently though long risk appetite. For NZD/USD, sell with reverse stop 0.7810, target 0.7845 on break.

LATAM – USD/BRL opened Sao Paulo circa 1.6135 and gapped immediately lower as traders were disappointed at the lack of substance in Fin Min Mantega’s Real weakening plan. Simply addressing downside pressure on USD/BRL created by issuing short term debt or offshore bank loans gave the commercial sector a green light to cover USD receivables. The pair plunged to 1.5945 lows and just kept sliding, eventually hitting 1.5815 lows before closing at 1.5895. Q1 motor vehicle sales hit a record 821k, +4.7% in the quarter; m.v. exports $3.27bn, +25.8% y-on-y. March IPCA (national CPI) +0.79% unch from Feb (+0.8%) Bovespa closed +0.11% at 69,109.54.USD/MXN opened New York at 11.8100/20, got slammed down to 11.7620 then reversed to highs by 11.8260, closing Mexico City at 11.7900. The Peso took its lead from the Real which soared on relief that the Fin Min’s late night speech last night disappointed (see above) WTC oil closed +$1.47 at $110.30 as violence in Libya continues, a fresh cycle high. Mexican stocks closed -1.0% at 37,441. MXN CPI +0.319% March vs +0.29% f/c,  y-on-y +3.04% f/c 3.15%. MXN core CPI +0.3% March (0.39%)

FX Charting 

 he attached chart speaks for itself, if only the perma-doves at the FOMC had ears. We don’t need to say too much about the well-established pattern of monetary and fiscal policy neglect on display in the weekly chart dating back to the beginning of 2009 that shows the tight linkage between the amount of securities held by the Fed, the 10-year TIP spread (inverted here to match the ups and down of the dollar) and the USD index. The 10-yr TIP spread is blowing out to new post-credit crisis wides of 2.5% vs 1.7% last Aug when Fed Chairman Bernanke came up with the bright idea of QE2 and TIPPED it to his audience at Jackson Hole. 

 The trillion dollar question is whether the Fed will allow its balance sheet to shrink meaningfully after QE2 ends in June. If that were really what the markets were expecting, the TIP spread ought not be blowing out to new wides and the dollar should not be fumbling around near multi-year.

• BoJ leaves policy as is, mutan target zero-0.1%, cuts assessment of economy,sees strong downward pressure, production-exports-demand hit by triple calamity.

• Japan end-March foreign reserves $1.116 trln, +$24.54 bln over end-Feb.

• MoF flow data week-ended Apr 2 – Japanese sold net Y23.8 bln foreign stocks, Y1.1748 trln bonds, Y33.9 bln bills; foreigners bought net Y144.7 bln Japanese stocks, Y109.3 bln bonds, Y460.0 bln bills.

• Japanese firms hesitate on bond offerings as costs edge up – Nikkei.

• Chinese made up 22% of spending by foreigners in Japan in ‘10 – Nikkei.

• US government shutdown would delay release of economic data – Bloomberg.

• Portugal pleads for rescue – Wall Street Journal.

• Australia mar employment +37.8k, jobless 4.9%, participation 65.8%, +22k/5.0%/ 65.7% eyed, full-time employment +32.1k.

• NZ FinMin English – Government to support insurer AMI – Reuters.

Looking Ahead – Economic Data

• 06:45 FRA Feb trade balance, E5.7 bln deficit eyed; last E5.9 bln deficit.

• 08:00 NOR Feb manufacturing output; last +0.6% m/m.

• 10:00 GER Feb total industrial production, +0.5% eyed; last +1.8%.

• 19:00 USD Feb consumer credit, $4.75 bln eyed, IFR $6.0 bln; last $5.01 bln.

Looking Ahead – Events, Auctions

• 06:30 BoJ Gov Shirakawa press conference.

• N/A   EU ECOFIN, central bankers meeting in Budpest (till the 9th).

• N/A   ECB Tumpel-Gugerell, Gonzalez-Paramo at Berlin German-Spanish forum.

• N/A   British Chambers of Commerce annual conference in London.

• 07:45 Cleveland Fed Pianalto, BoI Rossi in panel discussion at Rome conference.

• 10:30 Spain E4.0 bln 3.4% 2014 Bono auction.

• 11:00 France E2.5/2.5/2.0/2.0 bln 2.5/4.25/3.5/4.5% 2020/23/26/41 OAT auctions.

• 11:00 BoE MPC policy announcement, no change in 0.5% repo rate eyed.

• 11:45 ECB policy announcement, 50 change of hike in 1% refi rate to 1.25% eyed.

• 12:30 ECB Pres Trichet press conference.
  (See North American Open for a detailed listing of US/NorAm releases, events.)

Currency Summaries

USD/JPY and the JPY crosses opened in Asia bid but offers from option players and Japanese exporters in USD/JPY and, to an extent, EUR/JPY helped push the whole JPY complex a bit lower. The bias does remain up for all however but some consolidation may have been in order given the massive gains seen in most of these pairs recently. USD/JPY moved up from 85.28 to 85.51 before easing back to 85.26. Large stops do remain above 82.75, the base of its weekly Ichimoku cloud, and above 86.00, 85.94 the spike high after solo Japanese intervention in September. Japanese importers are awaiting dips to buy anew with large bids eyed sub-85.00 and at 84.80. EUR/JPY traded similarly, rising to 122.55 before fading to 122.03. GBP/JPY faded from 139.58 to 138.97. AUD/JPY dipped to 88.90 ahead of very strong employment data, surging subsequently to 89.42 and highs not seen since September ‘08. NZD/JPY, the star performer overnight, traded soggy in a 66.14-63 range in Asia alongside other crosses, just below the 66.71 high overnight and consolidating recent gains.

EUR/USD opened in Asia at 1.4330 after trading to a 14-month high yesterday on heavy EUR/JPY demand and heightened expectations of ECB hawkishness at Pres Trichet’s press conference following a 25 bp hike in the refi rate. Edging up to 1.4337 early, it drifted lower however on reverberations of Portugal’s pleas for help and doubts in some quarters of the market of the ECB’s hawkish resolve. A low of 1.4300 was there before bids at 1.4300 and trailing down to 1.4280 discouraged attempts lower.

GBP/USD opened in Asia at 1.6331 and drifted lower to 1.6294 in relatively subdued trading ahead of ECB and BoE policy announcements later today. No change is eyed in BoE policy. EUR/GBP did little in Asia, opening at 0.8774 and trading 0.8769-81.

USD/CHF did little in Asia, confined to a tight 0.9178-95 range. EUR/CHF traded a bit soggy after the recent run-up, trading off from 1.3165 to 1.3137.

AUD/USD opened in Asia at 1.0440 after trading up to yet another post-float high of 1.0452 overnight. It dipped to 0.8420 early on light profit-taking and was trading around 0.8425 when Aussie employment data came in much better than expected. AUD/USD shot up to 1.0489 before option-related selling ahead of large barriers at 1.0500 discouraged attempts higher. The lure of carry trades into AUD looks keep the pair supported, especially with large stops tipped 1.05+.

NZD/USD opened in Asia at 0.7793, just below the new trend high of 0.7807 seen overnight. It slipped to 0.7770 early on profit-taking but demand returned as Asia became fully operational and a move back to 0.7790 was seen later. Strong Australian jobs data dragged NZD/USD back to the New York high but then topside stops and fresh demand in AUD/NZD saw it slip to 0.7764. AUD/NZD slipped to a fresh trend low of 1.3370 prior to the Australian jobs data, reversing course thereafter to a 1.3485 high.

FX Charting 

Other Asset Markets

The Nikkei opened gap up at 9652.65 and traded up some more to 9687.18 early before falling off to 9578.47 in the afternoon. At 9592.78, the index is up only 8.41 points on the day. Other bourses in Asia are mostly lower with the Hang Seng trading just under par for the day, KOSPI off 0.57% and Sensex off 0.25% after its open. The Shanghai Composite is trading just above par after a soggy open.

JGBs traded heavy with futures in the lead. Euroyen futures traded heavy to unchanged. The yield on the benchmark 10-year issue is indicated at 1.305%, up from 1.290% at the close yesterday. The front futures contract trades 138.71, down 27 ticks after a 138.65-85 range. December Euroyen futures last traded at 99.665, down from yesterday’s 99.670 close.

Postscript – EEMEA FX

Summary/Outlook It was a mixed Wednesday for the EEMEA. In general, the EEMEA did garner support on fresh moves into selective risk assets and renewed interest in carry trades, and healthy gains were seen for TRY, RUB, ZAR and PLN. CZK and HUF were the losers on regional switching. Also, the Hungarian MPC vote was more balanced than expected at the March policy meeting. HUF may also have drawn flack from the Moody’s downgrade of 7 Hungarian banks. CZK lost ground despite NBC Janacek calling for an interest rate hike. EUR/PLN traded down to 3.9810, USD/ZAR to 6.6800 and USD/TRY to 1.5215.

Looking Ahead South Africa output, Russia reserves and Hungary output/budget

• Japan METI may require 25% cut in peak summer power use by large industrial customers of TEPCO, power-saving targets for smaller firms too – Reuters.

• Toyota denies report that it will restart production at most Japan plants next week – Reuters.

• ADB – Inflation a threat to sustained Asian economic recovery, developing Asia growth 7.8% in ‘11, 7.7% in ‘12.

• St Louis Fed Bullard – To push for cut in QE2 by $100 bln at next FOMC meeting – Wall Street Journal.

• Australia Feb owner-occupied housing finance -5.6% m/m, -4.0% eyed, investment housing finance -2.3%, volume at 10-year low.

• NZ Fonterra dairy prices off in latest auction.

• NZ Mar new car registrations +25.5% m/m, +12.7% y/y.

Looking Ahead – Economic Data

• 05:00 JPY Feb leading/coincident indicators, 90 eyed on leading; last 101.9.

• 07:00 ESP Feb industrial production, +3.4% m/m eyed; last +3.8%.

• 07:15 CHF Mar CPI, +0.2% m/m, +0.6% y/y eyed; last +0.4%, +0.5%.

• 08:30 GBP Feb ind production, +0.1% m/m, +4.3% y/y eyed; last +0.5%, +4.4%.

• 08:30 GBP Feb mfg production, +0.6% m/m, +5.8% y/y eyed; last +1.0%, +6.8%.

• 09:00 EUR Q4  GDP – revised, +0.3% q/q, +2.0% y/y eyed; prelim +0.3%, +2.0%.

• 10:00 GER Feb industrial orders, +0.6% m/m eyed; last +2.9%.

Looking Ahead – Events, Auctions

• N/A   BoJ Policy Board begins two-day meeting.

• N/A  BoE MPC begins two-day meeting.

• 10:30 UK DMO GBP1.0 bln 1.125% 2037 index-linked Gilt auction.

• 11:00 Germany E5.0 bln 1.5% 2013 Schatz auction.

• 13:00 Finland E750 mln each 1.75% and 4.0% 2016 and 2025 bond auctions.

• 16:30 World Bank Pres Zoellick speech in Washington, DC.
  (See North American Open for a detailed listing of US/NorAm releases, events.)

 Currency Summaries

USD/JPY and the JPY crosses all traded higher. Offshore funds were good buyers from the get-go, taking USD/JPY through 85.00 and tripping stops above. Good amounts went through and a high of 82.25 seen before the market fell back on profit-takes and a smattering of exporter sales. USD/JPY roared back from just below 85.00 however with Japanese importers on the bid alongside offshore funds. A high of 85.53 was seen ahead of the Tokyo lunch before it eased off, again on profit-takes. Specs are eyeing more stops above 86.00, the post-September intervention high just ahead of this level and with large option barriers tipped here as well. JPY crosses also saw good buying from funds. In addition to AUD/JPY, EUR/JPY, GBP/JPY and NZD/JPY were targeted in a full-blown move into yen-funded carry trades. AUD/JPY rose from 87.65 and traded through resistance between 88.00-10 to 88.67 and levels dating back to October ‘08. EUR/JPY zipped from 120.72 to 121.91. More stops are seen above 122.00, 121.96 the top of its weekly Ichimoku cloud. GBP/JPY and NZD/JPY rallied from 138.39 to 139.67 and 65.00 to 66.06.

EUR/USD opened in Asia at 1.4225 and, after drifting down to 1.4205 early, it tracked higher on very good demand in EUR/JPY. EUR/USD rose to 1.4267 before offers ahead of 1.4280 discouraged attempts higher and later settled around 1.4260. EUR/USD could get some support later today from Asian sovereign names intervening against USD today to stop their currencies from strengthening. Stops are eyed above the 1.4283 trend high. A break targets 1.4415, a weekly high.

GBP/USD opened in Asia at 1.6300 after a stellar performance overnight on strong UK services PMI and heightened expectations of a BoE rate hike as early as May. Edging down to 1.6293, early, it was swept up to 1.6339 on heavy GBP/JPY buys by funds. Trading around 1.6330, the market is targeting the March 22 trend high at 1.6403 and stops are building above 1.6405. EUR/GBP was steady around 0.8730, trading a 0.8720-35 range in Asia.

USD/CHF rallied alongside USD/JPY to 0.9296 before falling back. The low in Asia was 0.9245. EUR/CHF rallied from 1.3155 to 1.3244 before steadying just off its high.

AUD/USD opened in Asia at 1.0330 and moved down to 1.0315 on the combination of USD/JPY breaking higher and standing AUD/JPY offers between 88.00-10. AUD/JPY eventually broke higher and helped push AUD/USD up to 1.0376 and steady just this high. AUD/USD could get some support later today from Asian sovereign  names with a number of Asian central banks intervening to keep their currencies from rising against USD. Many now focus on the post-float high of 1.0422 and option barriers just above at 1.0450.

NZD/USD opened in Asia at 0.7680, off from a high of 0.7723 in New York. It moved down to 0.7668 early before going bid thereafter and trading up to a new trend high of 0.7727 on NZD/JPY demand. NZD/USD later drifted off to 0.7705. AUD/NZD traded a relatively tight 1.3423-62 range and in consolidation mode just off yesterday’s 1.3386 low.

Other Asset Markets

The Nikkei opened gap up at 9668.11 and, from an early high of 9671.46, ratcheted down to 9562.16. It has since bounced. At 9633.32, the index is currently up 17.77 points on the day. Other bourses in Asia are mostly higher after a mixed open with the Shanghai Composite up 0.81%, the Hang Seng up 0.53%, KOSPI up 0.13% and Sensex up 0.49%.

JGBs are off in rather directionless trading. Cash 10s and futures were especially weak. Euroyen futures were mixed in low-volume trading. The yield on the benchmark 10-year issue is indicated at 1.290%, up from 1.270% at the close yesterday. The front futures contract trades 139.04, down 23 ticks after a 138.94-139.21 range. December Euroyen futures last traded at 99.670, unchanged from yesterday’s close.

Postscript – EEMEA FX

Summary/Outlook The main event Tuesday was the widely expected NBP rate hike. The 25 bp move took the key policy rate up to 4.0%, and the hawkishness seen in accompanying comments suggests the NBP will continue to be vigilant on price pressures. EUR/PLN played out a 4.0075-4.0300 range, towards the low headed into the close. Elsewhere, Czech CB rhetoric hints at a May rate hike. Cuts were also seen possible however if problems with Libya and Portugal remain unresolved. EUR/CZK traded a tight 24.410-465 range and was down on the day. RUB was only marginally down on the day with the slight slip in March service PMI neutralized by higher crude oil prices.