USDJPY at possible intervention levels

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 29^th March when we change our clocks in the UK.

Reports of mines in the Strait of Hormuz and Iranian attacks on commercial ships has pushed WTI and Brent back up towards $100 despite the agreement of IEA to release huge amounts from strategic oil reserves.  Equities continue to struggle and the US dollar is a touch higher once again, with GBPUSD currently 1.3380 and EURUSD 1.1550, with USDJPY up at 158.85. 

Well worth keeping an eye on USDJPY, this is pretty much the levels we hit back in January before probable intervention took the pair to an eventual low around 152.00 so if Japan and US do have something of a line in the sand it is not inconceivable that we’ll see a downside shift.  We’ve already had a bit of verbal intervention, BoJs Ueda has warned of the impact of a weak Yen on inflation leading the market to start looking at a potential rate rise in April.  However officials may decide to see out this bout of USD strength before acting, rather than fight it.  

Meanwhile AUD continues to be the outperformer helped by a higher inflation expectation overnight which will only go to solidify thoughts of an RBA rate rise next week.

The calendar today isn’t particularly exciting but of course with the Iran conflict still in full flow we have plenty to keep our eye on.  Trump has suggested they are running out of targets in Iran which, although it may mean the end of the attacks is not far off, there hasn’t been much in the way of regime change so I’m not sure the US could call this a victory.  In addition, the FBI have warned that Iran could look at striking targets on the US mainland using drones launched from ships in the Pacific.  That would put the cat amongst the pigeons for sure.

In sport, its been a bad start to the Champions League for English teams, with Man City and Chelsea losing heavily last night leaving them to join Spurs needing to overcome a three goal deficit in the second leg.  Arsenal grabbed a draw against Leverkusen with a very late and rather soft penalty. Aston Villa and Notts Forest are in action in the Europa League this evening, and Crystal Palace appear in the Europa Conferrence League. 

Have a great day…

-  11.00 CBRT rate announcement

-  12.30 US initial jobless claims, housing starts, building permits

-  15.00 Feds Bowman speaks

-  18.00 US monthly budget statement

-  21.30 NZ business PMI

-  07.00 UK GDP, industrial production