Key overnight events:

  • US retail sales in February fell 0.1% month-on-month, a touch better than the estimated fall of 0.2%, while the prior figure was revised down to -0.4%. February PPI matched forecasts of -0.2%, slowing from a 0.1% increase the previous month; inflation continues to languish below the Fed’s goal.
  • The S&P 500 Index fell 0.2% on low volume, as investors look ahead to tonight for further clues on the Fed’s future trajectory of interest rates. According to Bloomberg’s survey, the Fed’s dot plot is forecasted to show 3 hikes instead of 4 this year, with rates to remain on hold tonight. Much focus will be on Yellen’s press conference and on whether she adopts a more hawkish or dovish statement; the general sentiment is plans for additional tightening have been postponed, but not for long.
  • WTI futures expiring in April slid 2.3% to settle at $36.24/bbl, Russia said that Iran has “reasonable arguments” for not joining an alliance to cap oil output.
  • The BoJ yesterday left rates on hold at -0.1%, as Governor Kuroda indicated that more asset purchases and rate cuts remain on the table. In its statement, the BoJ indicated a downgrade in its assessment of the economy. Kuroda added further today that, theoretically, a -0.5% rate is possible.
  • The Bloomberg Dollar Spot Index, which tracks the US dollar against 10 major peers, rose 0.2% ahead of tonight’s FOMC announcement. Commodity-linked currencies like the Brazilian real, Australian and Canadian dollars lost at least 0.8% amid the overnight sell-off in commodities.



  • Spot 1.3803
  • Retail sales in January rose 7.5% year-on-year, higher than the 3.1% increase expected, on the back of a surge in car sales. Excluding autos, the increase in retail sales was reported at 1.4% year-on-year, beating the -3.8% estimate.
  • After reaching a high of 1.3827 last night, USDSGD has pared some of its gains and continues to fluctuate around the 1.3800 handle.
  • Non-oil domestic exports for February is due for release tomorrow, and a 0.8% year-on-year fall is expected.



  • Spot 0.7455
  • AUDUSD fell 1.2% yesterday, amid weaker commodity prices and broader USD strength overnight. To the downside, 0.7385 is likely to provide good support.
  • Australia’s February jobs report is due out tomorrow, with employment change expected to come in at 13,500 and employment rate forecasted to remain steady at 6.0%.



  • Spot 1.3362
  • USDCAD climbed 1% overnight, back towards the 1.3400 handle, where it has struggled to close above since the start of the month.
  • Prime Minister Trudeau will post a deficit of about C$30 billion in his first budget next week, signalling he won’t unveil additional initiatives to kick-start the economy, government officials said yesterday.



  • Spot 6.5177
  • USDCNH looks to be headed for its biggest 3-day climb since January on concern that a potential tax on FX transactions will spur capital outflows and increase depreciation pressures; USDCNH reached a high of 6.5195 earlier today.
  • During the annual NPC press conference this morning, Premier Li said that China’s economic performance is diverging across provinces as challenges rise and sluggish global growth weighs on prospects. Some highlights of his other comments include:
    • China has tools to cut debt ratio with enterprises and one of them is converting debt to equity; banks are well equipped to handle any increase in bad loans
    • China’s economy won’t have a hard landing and the government will ensure growth hits its target
    • Regulators need to coordinate more to ensure financial market stability
    • Stock connect between Hong Kong and Shenzhen to open this year
    • Ties with the US will be unaffected regardless of who becomes President



  • Spot 8.5579
  • 18 out of 20 economists surveyed by Bloomberg see the Norges Bank lowering its deposit rate by 25bps to 0.5% tomorrow.
  • USDNOK has climbed about 2% from its lowest point this year of 8.3966, made last Friday.


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UEN: 201419754M

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