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Incoming Bank of Japan Kazuo Ueda says to maintain the ultra-loose policy “for now”. The Federal Reserve’s favourite measure of inflation, the PCE, is expected to rise. The oil market gained in early European trade as possible Russia output cuts loom.
USDCAD maintained the upper ground ahead of the US PCE data. Core Personal Consumption Expenditure, the Fed’s preferred measure of inflation, is expected to have risen to 0.4% from 0.3% in the fourth quarter. If the PCE comes in more than forecast then the dollar would gain more momentum to the upside as the possibility of more than 25 bps would be high. In Canada, Wholesale sales and Manufacturing sales will be due later in the day. The pair was up +0.21% with the upside traction capped by 1.3580. An extended move-up may give buyers 1.3700.
EURGBP trimmed a 2-day rally by -0.21% from the 0.8820 support-turned-resistance. The EUR lost ground after the German GDP showed a contraction in the fourth quarter. Year-on-year GDP slumped 0.3% vs 0.5% surveyed. On a quarterly basis, the GDP fell -0.4% from -0.2%. The sterling got supported by positive consumer confidence for February. Gfk consumer confidence appreciated by 5 points to -38 from an estimate of -43. The pair may revisit 0.8720 if sellers manage to breach the 0.8784 and 0.8765 lows, otherwise, the 0.8870 high may be next on the upside.
NZDJPY kept gains of +0.11% in a 9-day range between 83.50 and 84.50. In Asian trade, the Japanese National Core CPI rose to a fresh 41-year high of 4.2% from 4.0%. Remarks from the incoming BoJ Governor in April noted that ultra-loose monetary policy may stay for a while. Hawkish remarks from the RBNZ continue to act as a tailwind to the NZD after hiking by 50 basis points. A move above the current range may give bulls 85.00 while a leg lower may set targets at 83.00.
European stocks edged lower following downbeat data from Germany. The FTSE100 fell -0.07% with targets seen at 7900 and 7880. CAC40 lost -0.83% from the 7360 intraday resistance. The slide may give 7280. DAX in Germany was down -0.63% as sellers eye 15357 and 15240.
US stock futures followed through European share trade as rate hike expectations rose. The DJIA futures were down -0.31%, capped by the 33200 psychological mark. A move lower may give 32 480. S&P 500 futures fell -0.44% below the 4000 mark, with targets at 3950 on an extended slide. US100 futures tanked -0.76% as the 12000 low looks fragile.
Additionally, gold prices fell ahead of the US inflation data. Expectations of more rate hikes from the Fed have subdued the yellow metal in the meantime. The XAUUSD tumbled -0.12% extending a 5-day slide below $1850. Near-term support is found at $1800.
