Daily Market Outlook - Tuesday, March 21

Stock, Trading, Monitor, Business, Finance, Exchange

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Banking Concerns Calmed, As US Considers Backstopping All Deposits

Asian equity markets took Wall Street's lead, with most markets printing gains given the retreat in market fears around the banking sector as investors digested Credit Suisse's emergency acquisition by UBS and fresh optimism that FDIC’s deposit insurance amount could be increased. The ASX 200 nudged up towards a 1% gain for the session as the RBA Minutes from the March meeting highlighted that policymakers were reconsidering the case for pausing at the April meeting which would allow time to reassess the outlook for the economy, however, the board also noted that further tightening is likely necessary to defeat persistent inflationary pressures. The Hang Seng and Shanghai Comp were also in the green, recovering as Hong Kong benefitted from strength in consumer stocks and the mainland was once again supported given ongoing PBoC’s liquidity injection provisions the upside was seen as contained on higher money market rates in China where the overnight repo rate rose to its highest in more than 2 years. 

The German ZEW survey will be one of the first indications of March Eurozone economic activity in the single currency area. Market watchers expect that sentiment will have likely retreated reflecting new economic uncertainties, in light of the recent banking turmoil. 

UK Chancellor Hunt is scheduled to appear before a House of Lords Committee later today. Given that the Committee recently released a report on employment supply issues, Hunt may be quizzed on whether last week’s budgetary statement on pensions and childcare is likely to move the needle in materially combating the employee shortage situation. February UK Inflation data will be released early Wednesday. Expect both the headline and core annual CPI inflation to have declined again, as the headline is expected to have retreated sub 10% for the first time in six months.

In the US, new home sales are expected to have advanced in February. The recent pullback in US bond yields suggests lower mortgage rates adding to incentives for buyers as such supporting new home sales activity.  

FX Options For 10am New York Cut 

  • USD/JPY: 116.65 ($629m), 142.00 ($605.4m), 137.50 ($508.4m)
  • EUR/USD: 1.0690 (EU880.3m), 1.0545 (EU708.7m), 1.0250 (EU658.8m)
  • USD/CNY: 6.9500 ($574m), 7.1000 ($527m), 6.9300 ($501.1m)
  • AUD/USD: 0.7050 (AUD769.3m), 0.7200 (AUD736.1m), 0.6750 (AUD411m)
  • USD/CAD: 1.3690 ($429.8m), 1.3700 ($320.2m), 1.3505 ($300.7m)
  • EUR/GBP: 0.8815 (EU386.5m)
  • USD/MXN: 18.77 ($454m)
  • GBP/USD: 1.2100 (GBP504.1m), 1.1910 (GBP405m), 1.1750 (GBP325m)
  • NZD/USD: 0.5900 (NZD445m)
  • EUR/USD downside strike premiums have eased but trade flows lack a directional bias and dealers say the focus is on volatility. Front end expiry risk reversals hold long term highs above 2.0 for JPY calls and reflect the risk of more USD/JPY losses. (RTRS)

Overnight News of Note

  • Asia Stocks Bounce Gingerly Tuesday But Bank Fears Lurk
  • European Stocks Set For Positive Open As Market Nerves Settle
  • U.S. Stocks Gain; First Republic Keeps Falling
  • US Studies Ways To Guarantee All Bank Deposits If Crisis Grows
  • Australia's Central Bank Was Ready To Consider Rate Pause In April-Minutes
  • Japanese Prime Minister Kishida To Visit Ukraine, NHK Says
  • ECB’s Lagarde: Market Turmoil May Do ECB's Work In Dampening Demand
  • ECB's Kazaks: Its Not Possible To Say That We've Stopped Hiking
  • ECB's Holzmann Waters Down Call For Three More Rate Hikes
  • China Gives Chipmakers New Powers To Guide Industry Recovery
  • China Overnight Funding Rate Soars Ahead Of PBoC Easing Measure
  • Dollar Languishes As Bank Crisis Fears Ebb On Credit Suisse Rescue
  • Oil Lower Tuesday As Banking Turmoil Holds Down Sentiment
  • Russia Jumps Above Saudi Arabia As China’s Biggest Oil Supplier
  • Tens Of Thousands Of Jobs At Risk After UBS Takeover Of Credit Suisse
  • Short Seller Warned US Regulator About Signature Bank In January

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

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 3900/10

  • Primary support is 3800
  • Primary objective is 4000
  • Below 3860 opens 3800
  • 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0650

  • Primary resistance is 1.0805
  • Primary objective is 1.0430
  • Above 1.0805 opens 1.0925
  • 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.22

  • Primary resistance  is 1.2265
  • Primary objective 1.2411
  • Below 1.2170 opens 1.2100
  • 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 132.50

  • Primary resistance  is 135.50
  • Primary objective is 130.00
  • Above 136 opens 137.90
  • 20 Day VWAP bearish, 5 Day VWAP bearish

(Click on image to enlarge)

AUDUSD Bias: Intraday Bullish Above Bearish below .6696 

  • Primary resistance is .6740
  • Primary objective is .6950
  • Below .6560 opens .6450
  • 20 Day VWAP bearish, 5 Day VWAP bullish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 26500

  • Primary support 23000
  • Primary objective is 30000
  • Below 23000 opens 22400
  • 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

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