Daily Market Outlook, March 17, 2023
Banks Bailing Out Banks
Asian stocks trade in the green heading into the weekend as the Credit Suisse backstop provided by the SNB and the US bank bailout of First Republic, with a team of the tier one investment banks in New York stepping up up to deposit USD 30bln into the beleaguered lender, reminiscent of the original namesake J.P.Morgan's move in the 1900’s. The Nikkei 225 nudged above 27,000 as the Hang Seng and Shanghai Comp, both traded 1%+ into the weekend with Baidu notching up double digit returns coupled with another round of liquidity provision from the PBoC the market mood ends the week on a buoyant tone after the earlier turbulence witnessed at the start of the week. Noteworthy as we head into the European session the ECB has convened an ad-hoc supervisory board meeting today to review developments in the banking sector following market turmoil according to Reuters.Today’s US data docket is headlined by industrial production with the undercard of University of Michigan consumer sentiment survey, market watchers expect a 0.5% for February industrial production print, with a mild retreat in consumer sentiment in March as the recent spending appetite wanes.
FX Options For 10am New York Cut
EUR/USD: 1.0700 (EU4.06B), 1.0775 (EU1.39B), 1.0500 (EU1.23B)
USD/JPY: 130.00 ($3.28B), 118.00 ($2.29B), 132.00 ($2.05B)
USD/CNY: 6.8500 ($1.51B), 6.6400 ($830M), 6.5000 ($830M)
AUD/USD: 0.6650 (AUD1.19B), 0.6580 (AUD830.7M), 0.6700 (AUD610.6M)
USD/CAD: 1.3940 ($351.5M), 1.3000 ($340M), 1.3670 ($335.7M)
GBP/USD: 1.2000 (GBP780M), 1.1800 (GBP441.4M), 1.0774 (GBP417.7M)
USD/MXN: 18.20 ($376M), 18.55 ($346.6M)
USD/KRW: 1325.00 ($761.7M), 1310.00 ($429.3M)
EUR/GBP: 0.9050 (EU431.9M)
Option risk reversal contracts increased their implied volatility premiums for USD calls versus EUR, GBP and AUD, while USD/JPY risk reversals increased their JPY call/USD put premium to flag the most vulnerable FX directions.(RTRS)
Overnight News of Note
Asia Stocks Gain On Bank Rescue And Bond Yields Climb
First Republic Secures $30 Billion Rescue From Large Banks
S&P Affirms US 'AA+/A-1+' Sovereign Ratings; Outlook Remains Stable
Banks Borrow $164.8 Billion From Fed In Rush To Backstop Liquidity
Goldman Sachs Lowers ECB May Rate Hike Estimate To 25 Bps
Westpac Sees RBA Pausing Rate Hikes In April, Lower Peak
China Does U-Turn On Bond Feeds After Sudden Halt Roiled Market
Relief Rally On Banks Rescue Lifts Riskier Currencies; Dollar Slips
Oil Set For Worst Week This Year As Traders Watch For OPEC+ Move
FedEx Raises Fiscal 2023 Earnings Forecast, Shares Soar
First Republic Secures $30 Billion Rescue From Large Banks
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 3935
Primary support is 3800
Primary objective is 4000
Below 3840 opens 3790
20 Day VWAP bearish, 5 Day VWAP bullish
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EURUSD Bias: Intraday Bullish Above Bearish below 1.0650
Primary resistance is 1.0805
Primary objective is 1.0430
Above 1.0805 opens 1.0925
20 Day VWAP bearish, 5 Day VWAP bearish
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GBPUSD Bias: Intraday Bullish Above Bearish below 1.21
Primary resistance is 1.2265
Primary objective 1.1785
Above 1.2265 opens 1.2337
20 Day VWAP bullish, 5 Day VWAP bullish
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USDJPY Bias: Intraday Bullish above Bearish Below 133.50
Primary resistance is 135.50
Primary objective is 130.00
Above 136 opens 137.90
20 Day VWAP bearish, 5 Day VWAP bearish
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AUDUSD Bias: Intraday Bullish Above Bearish below .6696
Primary resistance is .6740
Primary objective is .6950
Below .6560 opens .6450
20 Day VWAP bearish, 5 Day VWAP bullish
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BTCUSD Intraday Bias: Bullish Above Bearish below 25000
Primary support 23000
Primary objective is 26750
Below 23000 opens 22400
20 Day VWAP bullish, 5 Day VWAP bullish
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!