Yen pairs have been cruising higher for the most part of the day.
Can the upbeat U.K. jobs report might take GBP/JPY further north?
Before moving on, ICYMI, yesterday’s watchlist checked out GBP/USD’s bullish pullback on adjusted Fed tightening expectations. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
New Zealand reports a 26.3% month-over-month drop in visitor arrivals for January, following previous 55.6% surgeFed Chairperson Powell says that SVB collapse requires a “thorough, transparent and strict review” with results to be published on May 1
Nomura becomes first of major financial institutions to project a 0.25% rate CUT from the FOMC in March meeting
Australia’s Westpac consumer sentiment unchanged at 78.5 in March, holding near 30-year lows as confidence in labor market started to wane
North Korea reportedly launched two short-range ballistic missiles according to South Korean military
Australian NAB business confidence index sank from +6 to -4 in February, reflecting worsening conditions as wholesale orders eased
U.K. claimant count change reflected 11.2K drop in unemployment versus projected 12.5K increase in joblessness for February, previous reading upgraded to show larger 30.3K reduction in claimants from initially reported 12.9K drop
U.K. average earnings index slipped from 6.0% to 5.7% in three-month period ending in January as expected
U.K. jobless rate held steady at 3.7% instead of rising to the estimated 3.8% figure for January
Swiss producer prices tumbled by 0.2% month-over-month in February versus estimated 0.5% uptick and previous 0.7% gain
Price Action News
Forex price action seemed to calm down during the Asian market hours, following the SVB fiasco and panic from the previous trading sessions.
Financial analysts from Nomura already called for a 0.25% rate cut from the FOMC in this month’s meeting while Goldman Sachs and Barclays predict that the central bank might sit tight.
Still, USD/JPY chalked up pretty significant moves, as traders continued to adjust their Fed rate hike expectations while also reacting to news of another ballistic missile launch by North Korea.
Jitters ahead of the U.S. CPI release also appear to be discouraging traders from loading up on dollar positions, as a slowdown in inflation is expected.
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. headline and core CPI at 12:30 pm GMT
FOMC member Bowman’s speech at 9:20 pm GMT
BOJ monetary policy meeting minutes at 11:50 pm GMT
Chinese retail sales, industrial production and fixed asset investment at 2:00 am GMT (Mar. 15)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
Guppy has been hanging out below the ceiling at the 163.00 handle ahead of the U.K. jobs release today.Fortunately for pound bulls, the numbers turned out mostly stronger than expected, as the economy actually added jobs instead of seeing more layoffs in February.
To top it off, the January figure enjoyed quite the upgrade to show a significantly higher pickup in hiring. While average hourly earnings slipped to suggest lower inflationary pressures, the jobless rate improved a notch to 3.7%.
With that, GBP/JPY appears to be attempting a break above its short-term range, which happens to be in line with its previous day highs.
In that case, the pair could set its sights on the next upside target at R1 (163.48) or even R2 (164.78) of its Standard Pivot Points.
After all, the Japanese yen has also been under some downside pressure, following reports of another missile launch by North Korea and leading up to the release of the BOJ meeting minutes in the next session.
A return in risk-off flows, on the other hand, might spark a flight to the safe-haven yen and a consolidation breakdown. If so, GBP/JPY could tumble to the S1 near the 160.50 minor psychological mark and previous day low.