Too early to be optimistic
Good morning
US data releases will be one hour earlier at 12.30 or 14.00 london time due to the US clock changes that took place at the weekend.
FX option expiries will be 14.00 london time, not the usual 15.00 london time.
This will be until Sunday 29th March when we change our clocks in the UK.
Trump’s comments that the Iran war was ahead of schedule and may soon be over have brought some much-needed positivity to the markets. Oil prices are back below $100, actually nearer $90, equities have recovered and the US dollar has lost ground, with GBPUSD and EURUSD seeing highs of 1.3480 and 1.1660, with both currently just 10-20 pips off those highs. USDJPY is currently 157.55 but has been as low as 157.30 this morning.
AUD has had a decent session, taking advantage of the improved risk sentiment but also pushed higher after some hawkish comments from RBA’s Hauser who has warned that inflation is still too high, while a couple of banks have raised Aussie CPI inflation forecasts on higher oil prices, all of which has increased the chances of an RBA rate rise later this month. AUDNZD is up at 1.1980, GBPAUD back down to 1.8925.
We know better than to get too carried away with positive news. This Iranian conflict is far from over and despite Trump sounding confident, he did temper the optimism by warning they haven’t yet won enough and a lot of focus remains on the Strait of Hormuz where Iran has proved it can currently almost stop the world from turning. The US are determined to not let that happen and are threatening massive further attacks should Iran try to hold up shipping. It does make me wonder whey UAE never built it’s own canal to save that treacherous journey, yes it would be a massive feat of engineering but not impossible.
We have a sparse economic calendar today. Tomorrow brings the US CPI inflation release which will certainly be of interest despite data taking a back seat during the Iran war.
This evening brings Champions League action, with Newcastle hosting Barcelona and Spurs travelling to Atletico Madrid. Atletico must be quaking in their boots!
- 12.15 US ADP employment 4 week average
- 14.00 US existing home sales
- 07.00 German HICP
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