New York Open: USD Consolidates Ahead of Housing Data, Fed Speak

is slightly firmer against most of the majors but weaker against the JPY, GBP, and NZD. The dollar index is consolidating after falling into its narrow daily ichomoku cloud and sees the top of the cloud currently and Tenkan line converge around 79.90. UST yields are lower across the curve with 10-year Treasury yields currently lower by about -2.6bps to 2.267%. It is a relatively light week of economic data with the focus on housing figures and Fed speak this week. The NAHB housing market index for March is due at 1000ET and is expected to rise to 30 from the prior 29 and New York Fed President Dudley will speak shortly.

• EUR slightly lower after the IMF said that Greece remains “accident prone” and more may need to be done. IMF staffers note further debt restructuring or additional financing if Greece struggles to implement measures. Sovereign yield spreads are mostly higher and Italian industrial orders fell in Jan. by more than expected with declines of -7.4% m/m and -5.6% y/y.

• JPY is outperforming the G10 currencies and is strongest against the NOK and CHF so far today. Weekly positioning data released by the CFTC on Friday showed that traders increased net-short yen positions to the most since April 2011. JPY-crosses have experienced sharp advances of late and while the trend appears to suggest continued yen weakness, we may be seeing a correction as the move may have been overextended. USD/JPY is currently trading around 83.15 and a drop below the 83 figure may see towards the convergence of the daily Tenkan line and 23.6% retracement of the rally from Feb. lows to Mar. highs which are around 82.25/35.

• CAD remains in a tight range against the USD with equities slightly lower and oil trading flat. WTI crude unchanged at time of writing and European bourses are mostly lower while U.S. stock futures are negative. Economic data due out of Canada shortly includes January wholesale sales which are expected to climb 0.3% m/m from the prior 0.9%. Technically, USD/CAD sees the daily Tenkan and Kijun lines converge around 0.9945/50 which has acted as resistance on recent tests and is the key short term pivot to the upside.

• AUD softer despite relatively upbeat comments from RBA Governor Stevens. The Gov. spoke in Hong Kong and expressed his confidence in China’s economic growth. He noted that the AUD has received a recent boost from official capital and said that the Australian economy is “not too bad” lately. The comments helped AUD/USD trade above the 1.06 figure, however the pair has come off the session highs as sentiment declines and is currently around 1.0580. On the fiscal front, Australia passed a 30% tax on iron-ore and coal mining profits.