Image Source: Unsplash
 

Markets Marking Time Ahead of CPI & FOMC Minutes Combo

Asian equities produced another subdued session taking their lead from lackluster trading on Wall Street as investors pare risk exposure ahead of today's double whammy of US inflation data followed by the minutes from the FOMC meeting. The Nikkei 225 continues to trade with a 28k handle, and comments from Warren Buffett on Japanese stocks have added further support to the bid tone as the investment stalwart believes that Japanese investments offer excellent opportunities at current valuations.

With no data of note on the European data docket, the focus is firmly Stateside with this afternoon's US CPI data, investors are expecting US annual CPI inflation to have retreated further from last month's 6.0%, the consensus amongst economists is for a decline to 5.1%. However, the concern for investors is that the US tracks the trend in the Eurozone, with ‘core’ inflation remaining stubbornly elevated, annual inflation in prices ex-food and energy is expected to show a marginal rise to 5.6% from 5.5%. This creates a further conundrum for the FOMC as they need to thread the needle between growth concerns and tightening fiscal conditions when weighing their next rate move. The tightening fiscal conditions are particularly pronounced in credit conditions and their potential impact on growth is an issue that investors will hope receives some attention in the FOMC March meeting minutes released this evening. At the press conference in March Fed Chair Powell appeared decidedly less hawkish than the stance taken in speeches earlier in the month, specifically, he referenced tighter credit conditions as an important input for negating future interest rate rises, however, these comments all came as the banking crisis was unfolding, as such the focus of the committee may have shifted to a more defensive stance, the minutes will be parsed by investors for a better understanding of the debate between officials and to focus going forward.
 

FX Options Expiries For 10 am New York Cut 

(In bold represent larger expiries, more magnetic when trading within daily ATR)

• EUR/USD: 1.0900-10 (2.974 BN)
• USD/CHF: 0.9105 (950M), 0.9165-75 (756M)
• GBP/USD: 1.2300 (894M), 1.2500 (483M)
• AUD/USD: 0.6700 (565M), 0.6750 (1.2BLN)
• USD/JPY: 132.15-25 (967M), 133.00 (410M), 134.10-15 (1.1BN) 
   

Overnight News of Note

• Asia Stocks Pare Gains Wednesday As Traders Wait On US CPI
• US Inflation Expected To Have Eased To Lowest Level In Two Years
• Fed’s Meeting Minutes To Detail How Officials Weighed Bank Risks
• Japan March Wholesale Inflation Slows For 3rd Straight Month
• IMF: More Flexible BoJ Yield Control Can Prevent Sharp Market Reaction
• BoJ May End Yield Curve Control By September: MUFG Markets Chief
• Fed’s Harker Fed To Sift Data To See If More Rate Hikes Are Needed
• Fed's Kashkari: Hopeful Signs Calm Is Being Restore In Bank Sector
• Fed’s Williams Says One More Hike Is ‘Reasonable Starting Place’
• Fed’s Goolsbee Calls For Policy Caution Amid Credit Uncertainty
• ECB’s Villeroy: Euro Zone Inflation At Risk Of Getting Entrenched
• UK Worker Supply Rises At Fastest Pace In Two Years, Survey Says
• UK House Sales At Pre-Covid Levels After 'Mini-Budget' Shock
• US Dollar Dips Wednesday Ahead Of Key US Inflation Data
• China 10-Year Bond Yield Drops To Lowest Since November
• Treasury Flows From Abroad Have Collapsed, BNY Mellon Says
• Banks That Shored Up First Republic Pushed To Boost Reserves
• Goldman Sachs To Expand Japan Banking Services, Nikkei Says

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

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4070

• Primary support is 4000
• Primary objective is 4207
• Below 3985 opens 3950
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

EURUSD Bias: Intraday Bullish Above Bearish below 1.0930

• Primary support  is 1.07
• Primary objective is 1.1128
• Below 1.0700 opens 1.0660
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

GBPUSD Bias: Intraday Bullish Above Bearish below 1.24

• Primary support  is 1.2250
• Primary objective 1.2659
• Below 1.22 opens 1.2010
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

USDJPY Bias: Intraday Bullish above Bearish Below 133.00

• Primary resistance  is 135.15
• Primary objective is 129.15
• 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 bearish

(Click on image to enlarge)

BTCUSD Intraday Bias: Bullish Above Bearish below 29000 

• Primary support 23000
• Primary objective is 30500
• Below 23000 opens 22400
• 20 Day VWAP bullish, 5 Day VWAP bullish

(Click on image to enlarge)

More By This Author: