FX Overnight

From the FXWW Chatroom: With the usual post-payrolls lull in full force yesterday, markets have been struggling to form a clear path over the last 24 hours or so. This morning we’re seeing most major bourses (aside from China) follow the lead from Wall Street last night and trade lower. Japanese equity markets in particular have seen the sharpest declines with the Nikkei currently -1.92%. A stronger Yen isn’t helping matters there while the latest numbers from the March Nikkei PMI data showed the composite falling below 50 last month for the first time in a year, tumbling 1.1pts to 49.9. Meanwhile, the Hang Seng (-1.40%) has also seen a steep fall after reopening from a public holiday yesterday, although bourses in China (Shanghai Comp +0.97%) are reversing course as we type from a softish start. Oil markets with energy prices continuing to react negatively to those Saudi Arabia comments from Friday. WTI finished yesterday with a -2.96% loss and has tumbled further this morning, currently hovering just north of $35/bbl.

· USD: firmer versus AUD, CAD and NZD which all succumbed to weakness in commodity prices.
· JPY: USDJPY plunged to a 110.71 low this morning as the Nikkei extended losses and oil continues to grind lower, stirring the current risk-off sentiment. BOJ’s Kuroda told the parliamentary committee it is possible to lower negative rate more if needed, with no effect on the Yen. Our trading desk saw ~half a yard of USDJPY selling.
· AUD: was on the backfoot earlier in the session, slumping to a 0.7568 low on the back of a much wider than expected Aussie Feb trade deficit, but is now trading a touch firmer ~1.1380 than the rest of the commodity block after the RBA kept rates unchanged as expected.
· NZD: Kiwi was down to 0.6791, extending an overnight fall of 1%.
· CAD: USDCAD traded ~ 1.3100.
· EUR: quiet between a 25 pip range (1.13845-1.1406) and Eurozone final Mar services PMI due later is unlikely to stoke a meaningful reaction from Euro. Slight downside pressure on the pair with cross flow, EUR/JPY dropped to 126.27 on selling activity from hedge funds.
· GBP: Cable has been sidelined with the market dominated by JPY cross flow. Today’s key focus is on UK services PMI for March and US ISM services PMI which should ultimately negate each other. A 1.4200-1.4320 sterling range will likely be in play until tomorrow’s FOMC minutes.
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