What happened in the US session?
Swiss authorities confirmed that Credit Suisse meets the capital and liquidity standards required, and the SNB will act if needed. The bank’s shares faced pressure following the revelation of a significant flaw in financial reporting and the refusal of its most prominent backer to offer more funding.
The latest US data generally underperformed relative to the forecasted and previous data. This could negatively impact the USD, suggesting weaker inflationary pressures, a slowdown in consumer spending, and a decline in manufacturing activity.
What does it mean for the Asian Session?
Amid the backing for Credit Suisse from the SNB, CHF’s safe-haven status could face potential disruptions due to increasing market concerns surrounding bank failures. Gold will likely benefit from a shift away from the Swiss Franc.
Oil will likely remain under pressure amid rising recession risks from the fallout in the US and Credit Suisse saga in Europe.
The Dollar Index (DXY)
Key news events today
Unemployment Claims
What can we expect from DXY today?
The forecasted number of Unemployment Claims for the period stands at 205K, slightly lower than the previous week’s figure of 211K. If the expectation holds, the US dollar may strengthen due to improved labour market conditions.
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 Bullish
Gold (XAU)
Key news events today
No major news events.
What can we expect from Gold today?
Despite the assurance from the Swiss authorities and the Fed on their respective banking sectors, lingering concerns about further contagion risks are likely to support the safe-haven gold.
Next 24 Hours Bias
Bullish
The Australian Dollar (AUD)
Key news events today
Employment Change
Unemployment Rate
What can we expect from AUD today?
Upcoming data releases from the Australian Bureau of Statistics include Employment Change (forecasted 49.7K, previous -11.5K) and Unemployment Rate (forecasted 3.6%, previous 3.7%). More robust employment figures could strengthen the AUD, while disappointing data may put downward pressure on it.
Central Bank Notes:
- Cash rate raised by 25 basis points to 3.60%.
- Board prioritises returning inflation to target, with a likely need for further monetary policy tightening.
- Board to closely monitor the global economy, household spending trends, inflation and labour market outlook when assessing interest rate increases.
- Next meeting on 4 April 2023
Next 24 Hours Bias
Weak Bearish
The Kiwi Dollar (NZD)
Key news events today
GDP q/q
What can we expect from NZD today?
The New Zealand GDP q/q report showed a 0.6% contraction, lower than the -0.2% forecast and the previous 1.7% growth. The data may lead to a dovish/less hawkish RBNZ monetary policy and reduced investor confidence.
Central Bank Notes:
- Monetary Policy Committee increased the OCR from 4.25% to 4.75%
- Higher interest rates are needed to reduce inflation and support employment sustainably
- Severe storms in North Island will increase inflation and disrupt production.
- Next meeting is on 5 April 2023
Next 24 Hours Bias
Bearish
The Japanese Yen (JPY)
Key news events today
No major news events.
What can we expect from JPY today?
Core Machinery Orders m/m is forecasted at 1.5% (prev. 1.6%). The Trade Balance is expected at -1.46T JPY (prev. -1.82T JPY). Revised Industrial Production m/m is forecasted to remain at -4.6%. Positive outcomes may support JPY, while negative results could lead to depreciation.
Central Bank Notes:
- The bank will continue with QQE with Yield Curve Control to achieve the price stability target of 2%
- Japan’s economy is expected to recover gradually
- The bank will not hesitate to take additional easing measures if necessary
- Next meeting is on 27 April 2023
Next 24 Hours Bias
Mixed
The Euro (EUR)
Key news events today
Main Refinancing Rate
Monetary Policy Statement
ECB Press Conference
What can we expect from EUR today?
The ECB will likely raise the Main Refinancing Rate to 3.50%, up from the previous 3.00%. However, the latest debacles surrounding Credit Suisse and the US banking sector may lead to a lower-than-expected hike.
Further, any signs of dovishness in the Monetary Policy Statement could negatively impact the Euro’s value; the press conference following the rate announcement and policy statement will provide further insights into the ECB’s decision-making process.
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 State Secretariat for Economic Affairs (SECO) is set to release its latest economic forecasts, which are expected to provide critical insights into Switzerland’s economic outlook. A weaker outlook could result in further depreciation of the CHF amid increased volatility from the debacle surrounding Credit Suisse.
Central Bank Notes:
- Current policy rate is at 1.00%
- Next meeting on 23 March 2023
Next 24 Hours Bias
Weak Bearish
The Pound (GBP)
Key news events today
No major news events.
What can we expect from GBP today?
The Office for Budget Responsibility projects no 2023 UK recession; inflation to drop from 10.7% (Q4 2022) to 2.9% by the end of 2023.
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
Mixed
The Canadian Dollar (CAD)
Key news events today
No major news events.
What can we expect from CAD today?
The Canadian Wholesale Sales m/m data is expected to show a positive growth of 3.0% (previous -0.8%). Meeting expectations could positively impact the CAD, indicating increased demand for Canadian goods and services.
Central Bank Notes:
- Bank of Canada maintains its target for the overnight rate at 4.5%
- Inflation eased in January, but price increases for food and shelter remain high
- BOC is prepared to increase the policy rate further to return inflation to the 2% target.
- Next meeting on 12 April 2023
Next 24 Hours Bias
Weak Bullish
Oil
Key news events today
No major news events.
What can we expect from Oil today?
Actual crude oil inventories for the current period are 1.6M barrels, higher than the forecasted 1.3M barrels but lower than the previous -1.7M barrels. This suggests a rise in inventories, possibly lowering demand and leading to a drop in oil prices.
Next 24 Hours Bias
Bearish
