MNI China Daily Summary: Wednesday, March 12

MNI BRIEF:Direction Of Inflation Shocks Harder To Call-Lagarde

MNI BRIEF: EU Targets Retaliation Tariffs On US Red States

MNI BRIEF: China To Boost Environmental Equipment Industry

MNI BRIEF: China SME Index Highest Since June 2021

MNI China Press Digest March 12: FDI, Cars, Retail Sales

MNI: JAPAN FEB CORP GOODS PRICE INDEX +4.0% Y/Y; JAN +4.2%

MNI: USDA: 2024/2025 CORN PRODUCTION EST 14.87B BSL

EZ/UK T-Bill Calendar: 12-Month BOT Auction on Wednesday

GERMANY: Union/SPD Migration Alignment After Turmoil Threatened Debt Deal (BILD)

GERMANY: Official Interim Election Results Tilt Towards Missing BSW & FDP

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FOREX: Greenback Treads Water Post-CPI, NZD Remains Under Pressure

FOREX
  • The July US CPI data failed to ignite momentum in currency markets, with slightly weaker headline prints unable to move the dial for short-term Fed pricing and this is well reflected in a broadly unchanged dollar index on Wednesday.
  • There was an impressive 100 pip swing for USDJPY in the aftermath of the data, however this remained an outlier across G10, with most pairs holding modest ranges.
  • Overall, the New Zealand dollar is the worst performing G10 currency on Wednesday, with the overnight dovish turn from the RBNZ continuing to drive the price action. NZDUSD (-1.3%) continues to plumb fresh session lows as we approach the APAC crossover, notably through the 20-day EMA and the psychological 0.6000 mark.
  • The solid backdrop of recent equities outperformance could point to this being a corrective pullback for the pair. However, protracted weakness might signal scope for a move back to key medium-term support of 0.5852.
  • GBP has also weakened on Wednesday following softer-than-expected inflation data in the UK. Despite the dip lower for cable, price remains above the 20-day EMA and a resumption of strength would highlight a more significant trend reversal and signal scope for a climb towards 1.2955, a Fibonacci retracement.
  • EURUSD resistance at 1.1008, the Aug 5 high, has been cleared and this confirms a resumption of the uptrend. Spot has been contained by 1.1046, the Jan 2 high, and a breach of this level would place the focus on 1.1084, the Dec 29 ‘23 high. Note moving average studies remain in a bull-mode set-up, highlighting a rising trend.
  • Focus swiftly turns to another session packed full of US data, highlighted by July retail sales and weekly jobless claims.
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