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Hawkish Powell Hobbles Risk Sentiment

Asian markets followed Wall Street lower on a Fed Chair fuelled sell-off in global equities, with the benchmark, SP500 seeing its biggest losses in two weeks shedding over 1.5% on the day, as the 2/10s US treasury yield inversion marked its highest levels since the 1980s, leading investors to flee risk exposure for the safety of government debt as the US 2yr yield topped 5% overnight, with markets now pricing a 50bps March rate hike, as the greenback soared to a three month high on a renewed safe haven bid, at the same time Gold was clattered printing a $40 drop on the day. 

The data docket in today’s European session is scant, in the Eurozone Q4 GDP is likely to be revised lower to 0.0% QoQ from the 0.1% estimate, driven by an unexpected contraction in the German release of -0.4%. In the UK, investors will parse commentary from Bank of England MPC member Dhingra who will be speaking on the UK's cost-of-living crisis. Dhingra is regarded as one of the more dovish MPC members, she voted against the decision of the majority at the last policy meeting to increase interest rates. 

The main event for markets today will be round two of Fed Chair Powell’s testimony, today the Chair will be back on Capitol Hill appearing in front of Congress, where he will likely repeat his statement made yesterday, which led to a meaningfully more hawkish repricing in markets. The US February ADP employment report, released later today will top the data docket, providing the first clues as to Friday’s non farm payrolls numbers, although the two data points are rarely perfectly aligned, markets will certainly have an eye on the release, it is noteworthy that ADP has been weaker than official nonfarm payrolls recently, any print at or above 200k for private payrolls would suggest the employment landscape remains tight stateside, adding further fuel to expectations of a larger Fed hike on March 22nd. The JOLTS report will provide a timely update as to job openings in the economy and is a keenly watched data input for the FOMC members, markets expect this number to confirm heat in the US labor market. Rounding out the US employment perspective will be Richmond Fed President Barkin, who is scheduled to speak later today about the US employment market. He recently commented that he believed that the current labor market conditions led him to see a terminal rate in the ballpark of 5.5-5.75% for this cycle.
 

FX Options Expiration New York Cut

• EUR/USD: 1.0560 (EU1.99B), 1.0670 (EU995.5M), 1.0600 (EU902.1M)
• USD/JPY: 137.00 ($1.72B), 135.00 ($1.21B), 130.75 ($917.7M)
• USD/CNY: 6.8650 ($1.13B), 6.0000 ($650M), 7.2150 ($500M)
• USD/CAD: 1.3560 ($425.3M), 1.3640 ($359.2M)
• GBP/USD: 1.1870 (£532.6M), 1.2110 (£358.4M)
• USD/BRL: 5.5000 ($704.7M), 6.1000 ($597.2M), 5.0500 ($350M) 
• USD/MXN: 18.30 ($852.4M), 18.75 ($679.2M), 18.15 ($469.1M)
• USD/KRW: 1310.00 ($392.8M)
   

Overnight News of Note

• US Futures Flat Following Selloff Fuelled By Hawkish Powell
• Investors Contemplate Fallout From US Rates Reaching 6%
• Goldman Lifts Peak Fed Forecast Rate After Hawkish Powell
• Hawkish Powell Pushes Dollar To Three-Month High
• Gold Slips To 1-Week Low After Powell Strikes Hawkish Tone
• China Bears Brunt Of Asia Tech Selloff After Hawkish Powell Talk
• Deepest Yield Inversion Since Volcker Suggests Hard Landing
• House Republicans Prepare For Possible Debt Ceiling Default
• House Speaker McCarthy Confirms Taiwan President Meeting
• Bank Of Canada Expected To Take Foot Off Brake Before Fed
• BoJ Set To End YCC Over 2023 But Tweak This Week Unlikely
• RBA’s Lowe Opens Door To April Pause, Says Macro Data Key
• EU Executive Proposes Countries Set Own 2024 Fiscal Targets
• UK Considers Budget Tax Breaks To Drive Business Investment
• UK Companies Curb Hiring As Economic Outlook Turns Gloomy
• SNB’s Jordan: Policy Still Too Loose, Warns More Hikes Possible

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

Technical & Trade Views

SP500 Bias: Intraday Bullish Above Bearish Below 4030

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

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EURUSD Bias: Intraday Bullish Above Bearish below 1.0610

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

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GBPUSD Bias: Intraday Bullish Above Bearish below 1.1915

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

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USDJPY Bias: Intraday Bullish above Bearish Below 136.75

• Primary support  is 133.50
• Primary objective is 138.20
• Below 133.40 opens 132.80
• 20 Day VWAP bullish, 5 Day VWAP bullish

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AUDUSD Bias: Intraday Bullish Above Bearish below .6696 - .6635 Target Hit, New Pattern

• Primary resistance is .7030
• Primary objective is .6541
• Above .7050 opens .7150
• 20 Day VWAP bearish, 5 Day VWAP 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 bearish, 5 Day VWAP bearish

(Click on image to enlarge)

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