Weak Sentiment Persists; FOMC, BoE, and SNB in Focus This Week
| Action Insight Mid-Day Report 3-17-23 |
Weak Sentiment Persists; FOMC, BoE, and SNB in Focus This Week |
Financial markets in today's Asian session exhibit a risk-averse sentiment, despite attempts on the weekend to stabilize the situation from the recent banking crisis. While UBS's acquisition of Credit Suisse may have provided slight support to Euro and Swiss Franc, stocks are trading in red, and commodity currencies are weaker. Yen, on the other hand, is showing strength, reflecting overall caution in the markets. However, most major currency pairs and crosses remain within Friday's range, exhibiting low volatility. Central bank decisions this week will be in the spotlight, particularly FOMC rate decision. Current expectations lean towards a 25bps hike, but this could change based on new developments. Fed's future trajectory is uncertain, and investors are looking for clarity from the latest economic projections and dot plots. In addition, BoE is anticipated to implement a 25bps rate hike before pausing, and SNB is likely to increase rates by 50bps due to resurgence of inflation. GBP/USD will be a focus this week with Fed and BoE rate decisions featured. Technically, current outlook is that consolidation pattern from 1.2445 has completed with three waves down to 1.1801. Break of last week high at 1.2203 will bring retest of 1.2445/6 resistance zone. Decisive break there will resume larger up trend from 1.0351. Let's see how it goes. In Asia, Nikkei closed down -1.42%. Hong Kong HSI is down -3.17%. China Shanghai SSE is down -0.46%. Singapore Strait Times is down -1.22%. Japan 10-year JGB yield is down -0.035 at 0.238. |
USD/JPY Daily Outlook Daily Pivots: (S1) 131.04; (P) 132.41; (R1) 133.26; More... USD/JPY's fall from 137.90 is still in progress and it's now touching 61.8% retracement of 127.20 to 137.90 at 131.28. Intraday bias remains on the downside for the moment. Sustained break of 131.28 will pave the way to retest 127.20 low next. On the upside, above 133.81 minor resistance will turn intraday bias neutral and bring some consolidations first. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 04:30 | JPY | Tertiary Industry Index M/M Jan | 0.90% | 0.30% | -0.40% | | 09:00 | EUR | Italy Trade Balance (EUR) Jan | -4.19B | 1.50B | 1.07B | | 09:30 | GBP | Consumer Inflation Expectations | 3.90% | 4.80% | | 10:00 | EUR | Eurozone CPI Y/Y Feb F | 8.60% | 8.60% | 8.60% | | 10:00 | EUR | Eurozone CPI Core Y/Y Feb F | 5.60% | 5.60% | 5.60% | | 12:30 | CAD | Industrial Product Price M/M Feb | -0.80% | -0.30% | 0.40% | | 12:30 | CAD | Raw Material Price Index Feb | -0.40% | -0.20% | -0.10% | | 13:15 | USD | Industrial Production M/M Feb | 0.60% | 0.00% | | 13:15 | USD | Capacity Utilization Feb | 78.50% | 78.30% | | 15:00 | USD | Michigan Consumer Sentiment Index Mar P | 67 | 67 |
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