The Japanese yen is the lead gainer today amid more hawkish BOJ murmurs but also as the FX market finally responds to the happenings elsewhere. USD/JPY is down 0.5% to 148.60 currently, also in part due to the drop lower in bond yields this week. 10-year Treasury yields are under 4.12% now, down roughly 23 bps from the highs two weeks ago.
The dollar is looking sluggish as such, with risk sentiment also continuing to hold up well so far in March trading. In the commodities space, gold continues to shine as it touched $2,161 earlier in the day. The precious metal is down to $2,154 now but is still up 0.3% thus far today.
Looking at the economic calendar, there will be a couple of light releases in Europe to move things along. But the main highlight will be the ECB policy meeting decision. The rate decision itself will be a non-event and so all the attention will be on Lagarde’s press conference.
She has a fine line to walk in trying to maintain the status quo. Markets have heeded the ECB’s caution to price in the first rate cut in June. And Lagarde’s job today is to keep traders in their lane and to stick to that pricing.
She will have to still angle towards talking about rate cuts but not sound too pushy, so as to avoid any miscommunications about April. It sounds fairly simple but we’ve seen policymakers bottle much easier jobs than this before. So, therein lies the risk for the euro and the rates market.
0645 GMT – Switzerland February unemployment rate
0700 GMT – Germany January industrial orders
0700 GMT – UK February Halifax house prices
1230 GMT – US February Challenger job cuts, layoffs
1315 GMT – ECB announces its March monetary policy meeting decision
1345 GMT – ECB president Lagarde press conference
I wish you all the best of days to come and good luck with your trading! Stay safe out there.