Euro Holds Gains After ECB Cut, Yen Rallies on Higher JGB Yields
| Action Insight Mid-Day Report 3-6-25 |
Euro Holds Gains After ECB Cut, Yen Rallies on Higher JGB Yields |
Euro remained firm following ECB’s decision to cut interest rates, a widely anticipated move. During the subsequent press conference, President Christine Lagarde emphasized a shift to “more evolutionary approach” to policy, now that monetary conditions have become “meaningfully less restrictive.” She also acknowledged the high levels of uncertainty, noting that “risks are all over.” Lagarde welcomed Germany and the EU’s proposed defense and infrastructure investments, highlighting that they could offer broad support for European growth. However, she also cautioned that increased government spending might push inflation higher via rising aggregate demand. At the same time, ECB recognizes downside risks to the economy, particularly if trade tensions escalate, thereby dampening exports and threatening global growth. Meanwhile, Yen resumed its recent rally against Dollar and recovered against European majors. Support for Yen came from an upswing in Japan’s 10-year JGB yield, which briefly touched 1.515%, its highest level since June 2009. Expectations of another BoJ rate hike this year have fueled speculation, while Germany’s surging benchmark yield also exerts upward pressure on Japan’s yield.... |
USD/JPY Mid-Day Outlook Daily Pivots: (S1) 148.12; (P) 149.15; (R1) 149.91; More... Intraday bias in USD/JPY is back on the downside with break of 148.08 temporary low. Fall from 158.86, as the third leg of the corrective pattern from 161.94 high, has resumed. Sustained break of 61.8% retracement of 139.57 to 158.86 at 146.32 will pave the way back to 139.57 low. On the upside, 149.32 minor resistance will turn intraday bias neutral and bring consolidations again, before staging another fall. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 00:30 | AUD | Building Permits M/M Jan | 6.30% | -0.10% | 0.70% | 1.70% | | 00:30 | AUD | Trade Balance (AUD) Jan | 5.62B | 5.68B | 5.09B | 4.92B | | 06:45 | CHF | Unemployment Rate Feb | 2.70% | 2.70% | 2.70% | | 09:30 | GBP | Construction PMI Feb | 44.6 | 49.8 | 48.1 | | 10:00 | EUR | Eurozone Retail Sales M/M Jan | -0.30% | 0.10% | -0.20% | 0.00% | | 12:30 | USD | Challenger Job Cuts Y/Y Feb | 103.20% | -39.50% | | 13:15 | EUR | ECB Deposit Rate | 2.50% | 2.50% | 2.75% | | 13:15 | EUR | ECB Main Refinancing Rate | 2.65% | 2.65% | 2.90% | | 13:30 | CAD | Trade Balance (CAD) Jan | 4.0B | 1.4B | 0.7B | 1.7B | | 13:30 | USD | Initial Jobless Claims (Feb 28) | 221K | 236K | 242K | | 13:30 | USD | Trade Balance (USD) Jan | -131.4B | -93.1B | -98.4B | -98.1B | | 13:30 | USD | Nonfarm Productivity Q4 | 1.50% | 1.20% | 1.20% | | 13:30 | USD | Unit Labor Costs Q4 | 2.20% | 3% | 3% | | 13:45 | EUR | ECB Press Conference | | 15:00 | USD | Wholesale Inventories Jan F | 0.70% | 0.70% | | 15:00 | CAD | Ivey PMI Feb | 50.6 | 47.1 | | 15:30 | USD | Natural Gas Storage | -96B | -261B |
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