Daily Market Outlook, March 29, 2023Banking Musical Chairs, Ermotti To Return As UBS Head, To Steady The ShipAsian equity markets mainly in the green on the session following a somewhat benign range bound session on Wall Street given the lack of macro catalysts as investors position for quarter end. The standout performer overnight was in the Hong Kong markets which significantly outperformed as tech heavy Hang Seng posted 2%+ gains on the back of Alibaba’s plan for a six-way split, the Nikkei also posted decent gains as the Japanese government agreed a staggering 114 trillion JPY budget for the fiscal year ahead. Risk sentiment also benefited from a downside surprise in Australian inflation data falling from 7.4 to 6.8% leading to investors repricing future rate moves from the RBA.Once again the data docket is pretty scant for the European session this morning, investors will eye comments for ECB speakers Kazimir and Schnabel, with Scnable set to address the NABE conference and is set to discuss the outlook for inflation in the Eurozone. The ECB has remained anchored to their rate increase path premised on the continued calm emerging in the banking sector, a positive development in the European banking sector came this morning with the announcement that current Swiss Re Chairman and industry stalwart Sergio Ermotti will return to the helm of UBS appointed new group CEO. On the inflation side of the ledger the first data inputs for March inflation are due out of Germany and Spain tomorrow morning, ahead of the Eurozone flash estimate set for release Friday morning. Today’s US pending home sales for February are expected to show a further retreat but investors will likely look past this data as they focus on Friday’s PCE deflator data, widely known as the Fed’s preferred gauge for inflation. US, headline annualised inflation is expected to decline but core inflation is expected to remain stubbornly elevated which will keep Fed officials firmly focused on the inflation battle.This evening the Bank of England’s Mann, believed to be the most hawkish MPC member, is scheduled to speak on ‘inflation and monetary policy’ at the NABE conference, UK investors will parse her comments inlight of the BoE Governor Bailey’s more optimistic outlook on the UK economy and his apparent lean towards an imminent pause in the UK rate cycle, any softening in Mann’s hawkish stance would add further credence to the pause narrative for Uk rates.FX Options For 10am New York Cut EUR/USD: 1.1000 (EU958.2M), 1.0780 (EU922.3M), 1.0800 (EU683.2M) USD/JPY: 130.75 ($630M), 131.75 ($615.2M), 128.10 ($310M) USD/CNY: 6.9100 ($1.6B), 6.8000 ($1.23B), 6.9000 ($671M) GBP/USD: 1.1500 (GBP505.7M), 1.2045 (GBP350M), 1.1900 (GBP325M) AUD/USD: 0.6650 (AUD680.8M), 0.6800 (AUD565.7M), 0.6600 (AUD384.7M) USD/MXN: 19.00 ($330.5M)NZD/USD: 0.5650 (NZD423.9M)CitiFX preliminary estimate of month-end FX hedge rebalancing flows points to moderate U.S. dollar selling against all major currencies except the euro. Although fixed income performed strongly across the board, our model suggests that both international equity and fixed income investors will likely be USD sellers this month-end,Japanese investors’ needs to increase hedges on well-performing foreign fixed income strengthen the need to buy the yen and sell the dollar, although strong performance of European and UK fixed income weakens the buy signal for euro and sterling.Overnight News of NoteUS Futures Rise Slightly After Nasdaq Falls For A Second DayAsian Stocks Rally As Banking Anxiety Eases As Alibaba SurgesPresident Biden Says Response To Banking Stress Not Over YetFed’s Watchdog Launches Own Investigation In SVB SupervisionUS Could Buy Back Crude For Strategic Reserves Late This YearBiden Pushes For Republican Proposal In Debt-Ceiling StandoffGOP Demand Speedy Energy Permit, Price To Boost Debt LimitUS Withholds Nuclear Data From Russia In Tensions EscalationBiden Aide Speaks With Chinese Counterpart As Tensions FlareChinese Planning Official Sees Risks To Global Growth, InflationBoJ New Deputy: To Examine Data Thoroughly In Guiding PolicyAustralia’s Monthly Inflation Eases, Bolstering Rate Pause CasesCanada Plot Taxes On Banks, Raising Billions With Dividend LevyUK Official Sees No Immediate UBS-Credit Suisse Deal Concerns(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Technical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 4000Primary resistance is 4078Primary objective is 3804Above 4040 opens 407820 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0830Primary support is 1.07Primary objective is 1.1128Below 1.0700 opens 1.066020 Day VWAP bullish, 5 Day VWAP bearishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2280Primary support is 1.2200Primary objective 1.2411Below 1.2170 opens 1.210020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 132.20Primary resistance is 135.15Primary objective is 129.15Above 136 opens 137.9020 Day VWAP bearish, 5 Day VWAP bearishAUDUSD Bias: Intraday Bullish Above Bearish below .6696 Primary resistance is .6740Primary objective is .6950Below .6560 opens .645020 Day VWAP bearish, 5 Day VWAP bullishBTCUSD Intraday Bias: Bullish Above Bearish below 26500Primary support 23000Primary objective is 30000Below 23000 opens 2240020 Day VWAP bullish, 5 Day VWAP bullish
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