Asian session – Boredom ahead of big risk events
Very quiet session with no movements worth highlighting through the Asian trade, all of the majors were stuck in tight 25 pip ranges ahead of the ECB rate decision later today and the Non-Far Payrolls on Friday. AUD/USD was the only pair offering some modest action, testing support at 1.0150.
Australian January balance goods/services +A$1.875 billion, while Building approvals sharply lower, -15.9%. UK wages showed sharp increase. RBNZ predicted to cut rates by 50 bps: Reuters Poll. Regional stockmarkets rose by up to 1% after upbeat US jobs report.
European session – Trichet sounds hawkish, Euro skyrockets
Market had geared up for a big day of flows and there was certainly no disappointment for those wanting high volatility. At the ECB monetary policy meeting, the bank left rates unchanged at 1%, but the renewed hawkish language from Trichet signaled a rate hike looms near. Euro went ballistic against all peers and stocks surged.
German January prelim retail sales +1.4% m/m, +2.6% y/y, stronger than median forecasts +0.5% m/m, +1.6%. Euro zone February final services PMI 56.8, below flash estimate of 57.2. Euro zone Q4 growth confirmed at +0.3% q/q, UK February services PMI 52.6, down from 53.6 in January.
American session – Safe haven assets find no love; risk appetite picks up
Safe-havens, CHF, JPY, XAU were on a retreat today, while the Euro extended gains. Focus stood on the rate hike talk in Europe and the jobs recovery in America, shifting the attention away from surging oil prices. The rumour among traders for tomorrow's non-farm payrolls is a rise of not less than 200k.
Initial jobless claims in the US fell by 20K to 368K, while the ISM Non-Manufacturing stood at 59.7, 0.2 points below expectations. Fed’s Lockhart told reproters he sees a gradual reduction of the dollar on its role as world's reserve currency but expects to remain dominant. Obama said Gaddafi must leave. Wall Street rallied strongly.