Looking for resistance at 1.3735 then 1.3767
Barring a bombshell from the Greek austerity press conference, we believe markets will stay relatively quiet ahead of the BoE, ECB and Fridays NFP.
Leaks of the announcement conference have spilled out, with media outlets citing Greek government sources, saying that the government has decided on $6.5 billion in extra austerity measures, decided to raise VAT by 2% to 21%, closing fiscal loopholes, and will be trimming salary bonuses by 30% in 2010.
There are rumors and IMM reports which suggest there are some still very big short GBP and EUR positions (although the short EUR trade lost most its steam in late February, despite heavy media coverage) and a small rally in risk could lead to decent short squeeze.
In Australia, the real GDP grew 0.9% q/q and 2.7% y/y in Q4 vs. 0.9% q/q & 2.4% y/y exp. Growth was slightly higher than we or the market were expecting, yet the positive news failed to translate into a stronger AUD.
• USD Feb auto sales at 10.38 mln unit annual rate, Jan 10.8 mln – Autodata.
• USD Feb light vehicle sales +12.2%, No. America-built 9.85 mln SAAR.
• GBP Feb Nationwide consumer confidence 80, Jan rev 74, highest since Jan “08.
• GBP Feb BRC shop prices +1.7%, Jan +2.3%, food price gains lowest in 3 yrs.
• AUD Treasaury Swan states he is looking to impose 2% cap on spending growth in “10-11.
• AUD Q4 GDP printed to the upside at +0.9% q/q, as exp +2.7% y/y, +2.4% exp.
• AUD Feb new vehicle sales +9.8% m/m, +17.1% y/y, -1.8% m/m sa
• Todays US ADP report will be important in adjusting forecasts for Fridays NFP
• WSJ suggests that US goverment will probe hedge fund on bets against EUR
