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All Eyes On Euro Area Inflation

ISM data left Wall Street closing on a whimper, markets are increasingly pricing a higher terminal rate for the US rate cycle, compounded by hawkish rhetoric from Fed members Bostic & Kashkari both of whom remarked that a 5%+ terminal rate is required to quash inflation, Kashkari specifically stated that services inflation was a primary concern and required real attention, as such the US 10yr yield tipped 4%, with markets pricing a further 75bp rise by the FOMC this year.

Eurozone headline CPI is expected to fall to 8.4% from 8.6% in January, a smaller decline than previously forecast. ECB officials will be focused on core CPI (excluding food and energy) which market watchers expect to rise to a new record high of 5.5% from 5.3% in January, driven by services sector wage inflation. The January unemployment rate is expected to stay at all-time lows anchored at 6.6%. The ECB’s minutes from the latest policy meeting in February will be released later this morning and should offer more clarity on discussions, however, the board has been very transparent in communicating its belief that further rate rises are required throughout the first half this year. Stateside US weekly jobless claims data is pencilled in for another print below 200k as has been the case for the past six weeks which is still signalling a very tight labour market. Fed Governor Waller will make remarks on the economic outlook later this afternoon, he is expected to tow the line of ‘higher for longer’.

Overnight, Japan’s CPI will also garner investor interest ahead of the national figures in a few weeks’ time, given market anticipation of policy normalisation by the Bank of Japan later this year. China’s Caixin services PMI will also be parsed for further confirmation of an economic uptick post-Covid restriction relief.
 

FX Options Expiration New York Cut

• EUR/USD: 1.0620 (EU1.09B), 1.0660 (EU882.8M), 1.0800 (EU846.6M)
• USD/JPY: 125.00 ($1.1B), 132.00 ($1.1B), 136.65 ($855.5M)
• GBP/USD: 1.2080 (GBP307.9M) 
• USD/CNY: 6.6500 ($600M), 6.9000 ($535.9M)
• AUD/USD: 0.7250 (AUD330.1M), 0.6700 (AUD328.1M)
• USD/BRL: 4.8500 ($425M), 5.4000 ($403.7M), 5.4810 ($401.4M)
• EUR/GBP: 0.9100 (EU412.1M), 0.8820 (EU390.6M), 0.9050 (EU379M)
• USD/KRW: 1320.00 ($692.6M), 1295.00 ($365M)
   

Overnight News of Note

• Asian Stocks Mixed After Wall St Falls On Inflation Fears
• China Increasingly Ambitious With 23 Growth Target, May Aim For Up To 6%
• Australia’s Building Approvals Post Record Drop, Drag On Growth
• Japan Firms Boost Spending Despite Global Economic Slowdown
• BoJ's Takata: Must 'Patiently' Maintain Ultra-Loose Policy
• Fitch Sees Recession Coming In Germany, Italy Later This Year
• Yuan Bears Eyeing 7 Per Dollar Face Hurdle As Congress Nears
• Trader Doubles Money On Big 6% Fed Rate Bet As Unwind Begins
• Oil Steadies As Optimism Over China Countered By Fed Concerns
• Chevron CEO: Oil Price Risk To Upside Begins In H2 23
• Salesforce Jumps After Predicting Fast Gains In Profitability

(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
 

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 3975

• Primary support is 3885
• Primary objective is 4384
• Below 3880 opens 3835
• 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0680

• Primary resistance is 1.0805
• Primary objective is 1.0430
• Above 1.0860 opens 1.09
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.2080

• Primary resistance  is 1.2265
• Primary objective 1.1785
• Above 1.2265 opens 1.2337
• 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 135.50

• Primary support  is 133.50
• Primary objective is 137.26
• Below 133.40 opens 132.80
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6790

• Primary resistance is .7030
• Primary objective is .6635
• Above .7050 opens .7150
• 20 Day VWAP bearish, 5 DayVWAP bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 23800

• Primary support 2100
• Primary objective is 26700
• Below 20300 opens 19500
• 20 Day VWAP bullish, 5 Day VWAP bearish

(Click on image to enlarge)

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