FX Daily Planet: London Open

EUR: ECB Trichet says not possible to enter and leave euro zone as if getting on and off a bus.

CNY: US Treasury Secretary Geithner and Vice Premier Wang “exchanged views on

U.S.-China economic relations, the global economic situation and issues relating to” a May meeting of officials from the two nations in Beijing, according to a Treasury Department statement

USD: FRB Chairman Bernanke said “Policy makers must respond forcefully, creatively, and decisively to severe financial crises”. While Bernanke didn’t comment on congressional proposals to curtail emergency powers, he said programs created under the authority helped the Fed “restore the flow of credit to American families and businesses.”

KRW: BoK left its policy rate unchanged at 2.0% as widely expected.
Today’s watchlist (all times BST; +9hrs for Sydney, +8hrs for Tokyo, -5hrs for New York

EUR: Germany Feb trade balance (EURbn, nsa) @7 :00 (Prev : 8.0)

SEK: Feb IP(%m/m, sa) @8 :30 (Cons : 0.8, Prev : 1.6)

NOK: Mar CPI (%oya) @9:00 (JPM: 3.6, Cons: 3.5); Mar CPI-ATE (%oya) @9:00 (JPM: 1.8, Cons: 1.9) ; Feb IP(%m/m, sa) @9 :00 (Prev : 0.3)

GBP: Mar PPI input (%oya) @9:30 (JPM: 7.3, Cons: 7.1); Mar PPI output (%oya) @9:30 (JPM: 4.6, Cons: 4.4)

CAD: Mar unemployment rate (%, sa) @12:00 (JPM: 8.1, Cons: 8.1); Mar employment (ch, m/m 000s, sa) @12:00 (JPM: 20.0, Cons: 26.0)

USD: Feb wholesale inventories (%m/m) @15 :00 (Prev :-0.2)
Overnight price action

FX: G-10 currencies trading in tight ranges of less than 0.2%; JPY and AUD underperforming the most falling 0.2% against USD. USD/CNY 12-month NDF trading slightly higher at 6.6185

FX vol: front end vols in cross JPY pairs fell 0.4-0.5vols reflecting the quiet spot market

Commodities: gold 0.2% lower at $1150.5/oz; oil 0.4% higher at $85.7/barrel

Bonds: JGB yields remain little changed with 7yr yield down 1bp

Equities: mixed performances with the sharp contrast in Hong Kong (+1.3%) and

Korea (-0.9%); the Nikkei trading flat and the Shanghai 0.5% higher.

Technical View for the day

Risk markets extended their latest setback a bit further yesterday but didn’t come close to any key-support yet which would raise the idea that the accumulation phase since March last year has finally reached an exhaustion point. The levels to watch are however well defined whereas key-support at 1151/50 in the S&P500 could be taken as a leading indicator. Above, the risk positive environment remains intact meaning that Commodity currencies can proceed to test their key-resistance barriers at 1.3290/78 (EUR/CAD), at 1.4146/1.4073 (EUR/AUD), at 1.8567 (EUR/NZD) and at 7.9158 in EUR/NOK Almost independent of the Greek problem the EUR remains under pressure against USD and is still on course towards its main target at 1.3093/81. Only a recovery past Fibonacci-resistance at 1.3380 would ease the pressure a bit but to really pick up stronger up-momentum it would take a break above 13519/39. The JPY has on the other hand managed to extend its latest recovery but in order to indicate a resumption of its previous up-trend it would require a break below 121.61/05 in EUR/JPY or below 137.01 in GBP/JPY.

ENDS