“With the dramatic expansion of its balance sheet since last summer, the ECB has become the most active central bank in the world”
– Klaus Baader, chief euro-area economist at Societe Generale
The European Central Bank’s balance sheet rose to a record 3.02 trillion euros for the week ended March 2, after a second long term refinancing operation conducted by the Frankfurt-based ECB.
“The market has more questions than answers right now”
– Alan Gayle, a senior strategist at RidgeWorth Capital Management
The Standard & Poor’s 500 plummeted by 1.54%, or 20.97 points, to 1,343.36. The Dow Jones Industrial Average lost 1.57%, or 203.66 points, to 12,759.15. The Nasdaq Composite Index slid by 1.36%, or 40.16 points, to 2,910.32.
“It is hard to be optimistic about the house-price outlook”
– Ed Stansfield, a property economist at Capital Economics Ltd.
U.K. house prices edged lower in February, said the Lloyds Banking Group Plc Halifax mortgage-lending unit on Tuesday. Prices fell 0.5 per cent to an average of 160,118 pounds.
CHF
“Even though the Greek problem is pretty much taken care of, it’s a never-ending story”
– John Plassard, director at Louis Capital Markets SA
Swiss stocks plunged on Tuesday to a one-month low after a report showed the euro area economy contracted 0.3 per cent in the fourth quarter.
JPY
“Stock markets are following currency movements because there are no big catalysts to be found”
– Yoshinori Nagano, a senior strategist in Tokyo at Daiwa Asset Management Co.
Japanese stocks closed lower for a second day on Tuesday after the yen strengthened.
“Euro-dollar goes back to $1.26 by the middle of April”
– Rochford Capital (based on Bloomberg)
EUR/USD is gaining bearish momentum. After penetrating 1.3096 the currency pair is expected to dip down to 1.2974/54 with the possibility to extend the move to 1.2624. Rallies are to be capped by resistances at 1.3242/50 and 1.3322.
“Forecasts that over two-thirds of bond-holders will participate in the bond swap have improved sentiment and led some to buy back the euro”
– Brown Brothers Harriman (based on WSJ)
EUR/JPY has plunged down to 105.58, from which the pair may rebound, though the rally should by tepid. Below 105.58 the currency couple is likely to target 103.86, while a key level is situated at 102.21/101.79.
“Cable’s attempts to rise above the $1.60 level have failed and we could it see drift lower”
– FXPro (Reuters)
Being that a previous support line located at 1.5765 did not manage to withstand bearish pressure, 1.5650/43 has now come into play. Resistances may be found at 1.5886 (200 day ma) and 1.6000.
“The market is in a risk-off environment, so the yen is more likely to be bought. It’s quite possible that the yen will strengthen beyond 80 per dollar”
– Sumitomo Mitsui Banking Corp. (based on Bloomberg)
Even though USD/JPY was unable to consolidate above 81.49/63, the long-term bias remains bullish for the pair. Once this level is overcome, we might observe a rally up to 82.23. Supports are at 80.42/50 and 80.00/79.95.
“If the Greek debt swap goes well and the U.S. job data points to continued recovery, then the market could return to the risk-on mood”
– CNBC
The US Dollar is expected to continue appreciating relative to the Swiss Franc. The initial target lies at 0.9257 (55 day ma), while subsequent goals are located at 0.9317 and 0.9595. Losses of the pair should be contained by supports at 0.9088 and 0.9075/23.
UK consumer spending rises for second month running
UK consumer spending edged up for the second month running in February, according to new figures fanning hopes that the economy enjoyed a modest bounce at the start of the year.
Obama offers mortgage relief to millions of homeowners
President Barack Obama announced on Tuesday a cut in fees on many government-backed mortgages that he said could help millions of homeowners refinance, part of an election-year push to boost the shaky U.S. housing market.
China Lambastes US Trade Bill, Won’t Adjust Yuan
A U.S. trade bill targeting Chinese imports goes against international rules and Beijing will not adjust the value of its currency to try to bridge a trade deficit that is Washington’s problem to fix, China’s commerce minister said on Wednesday.