Headlines:
- FX market still largely unfazed by negative broader market sentiment
- US futures pare losses on the day
- BOJ's Kuroda says expects Ueda to be able to achieve price and financial stability
- BOJ's Kuroda says will not hesitate to ease monetary policy further if necessary
- UK January monthly GDP +0.3% vs +0.1% m/m expected
- Germany February final CPI +8.7% vs +8.7% y/y prelim
- France January trade balance -€12.9 billion vs -€14.9 billion prior
- China February M2 money supply +12.9% vs +12.5% y/y expected
Markets:
- CHF leads, JPY lags on the day
- European equities lower; S&P 500 futures down 0.2%
- US 10-year yields down 9.1 bps to 3.831%
- Gold up 0.3% to $1,836.08
- WTI crude down 1.0% to $74.95
- Bitcoin down 1.9% to $19,854
The session started off with a full-fledged flight to safety, as equities continue to sharp fall from yesterday while bonds were heavily bid ahead of European trading.
The standout though was the FX market, as major currencies kept mostly steady and that sort of mood is carrying over now as we head towards the final stretch of the week. It seems like the only thing that currency traders are focused on is the US jobs report that is coming up.
The Japanese yen is the laggard after the BOJ left monetary policy unchanged in Haruhiko Kuroda's final meeting. USD/JPY briefly fell from 136.60 to flat levels around 136.10 before recovering that drop completely now.
The pound took its time to react to better-than-expected UK January GDP, as GBP/USD moved higher in the later hours from 1.1930 to keep near the 1.2000 mark now - just below its 100-day moving average at 1.2014.
Elsewhere, the franc was also more bid on the session as European equities slumped with major indices down by over 1% across the board. Other major currencies were less enthused and aren't doing a whole lot ahead of the non-farm payrolls data.
In the equities space, US futures gradually pushed higher during the session with the S&P 500 covering losses of up to 36 points in the early morning to keep marginally lower at the moment - down by 6 points. Is that a sign that investors are brushing aside the risks related to SVB or some positioning flows ahead of the big data later?
In any case, the bond market continues to show up in a more defensive manner as Treasury yields are heavily lower across the curve. That will keep the focus on the whole SVB situation, which will make for a very messy end to the week alongside the US jobs report at 1330 GMT.
