• EUR net spec position now long 13,090 contracts as of Tuesday vs previous week's short of 10,106

• JPY net spec long grows to 133,902 contracts vs previous long 133,651

• GBP net spec long rises to 29,193 contracts from long of 18,574

• AUD net spec short 48,226 contracts vs short of 48,233

• MXN net spec long 30,086 contracts vs long of 19,456

• CHF net spec short 36,957 contracts vs short of 37,775

• CAD net spec short 142,410 contracts vs short of 143,770

eur spec

(Burton Frierson)

(Adds "by" to line 2)

• USD/JPY firms on improving risk tone, short covering and corp bids

• Pair buoyed by favorable risk tone, higher Trsy yields and EUR/JPY gains

• Yields firm after the U of Michigan survey shows inflation expect. surge

• EUR/JPY rises after German political parties hammers out debt deal

• USD/JPY vols, skews remain under pressure as 148-150 range is established

• Momentum indicators,seasonals and close above 9-day EMA favors upside

• Resist: 149.20 March 12 high; 149.40-46 Feb 20 low and 21-DMA

• Supp: 147.78 March 12 inv. hammer low; 146.94 March 7 low; 146.52 Oct 2 high
Yen

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

• Cable drop contained, period of consolidation persists. Range: 1.2911-58

• UK GDP miss provides reminder that domestic factors are a headwind

• German parties agree major debt overhaul

• Fiscal divergence with UK supports dip buying in EUR/GBP

• Resistance: 1.3000-46 (pre-US election level). Daily RSI points to pullback

• Support: 1.2810 (Dec high), 1.2792 (200DMA), 1.2655 (38.2% fib of YTD range)

• COMMENT: Window of opportunity opens up for sterling bears

• BoE-speak round-up
gbpusd daily eod

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

• EUR/JPY rises on expectations that German spending package will be passed

• Cross pulls back from 162.32 day's high though holds above 161.35 cloud top

• Turning slow stochastics hint at deeper drop though seasonals are bullish

• Expanding weekly cloud offers resistance above 162

• Forward points, steady since early Feb, offer little directional bias

• Triangle forms between mid-June 2023 155 base and Apr 2024 desc. trendline

• May face near-term weakness if stays below the desc. trendline near 162.50

• Longer-term, potential for bullish EUR/JPY break after consolidation period
EURJPY

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)

Synopsis:

HSBC has revised its base case for USD/CAD back to a pre-US election status quo, as recent developments suggest delays or rollbacks in US-Canada tariffs. While the risk of a prolonged trade war remains, markets are now assuming no sustained tariffs, which aligns with HSBC’s 1.47 year-end target. However, if trade tensions escalate, USD/CAD could still surge toward 1.60 due to BoC easing and weaker Canadian growth.

Key Points:

1️⃣ No Sustained US-Canada Tariffs Now the Base Case 🌍

• HSBC had previously assumed tariffs would be fully imposed and sustained.
• Recent developments suggest delays/rollbacks, prompting the forecast shift.

2️⃣ Market Also Pricing in a No-Tariff Scenario 📊

• The FX market appears to be aligning with HSBC’s updated view.
• Tariff risk is still present but not the dominant expectation.

3️⃣ USD/CAD Year-End Target Revised to 1.47 💵

• The pre-election status quo suggests a more stable CAD outlook.
• A trade war escalation remains a risk scenario but is no longer the base case.

4️⃣ Risk Case Still Sees USD/CAD at 1.60 📈

• If tariffs are fully imposed, Canada could fall into recession, forcing aggressive BoC easing.
• This would drive significant CAD weakness, pushing USD/CAD higher.

Conclusion:

HSBC moves its USD/CAD base case back to a pre-election status quo, reflecting less likelihood of sustained tariffs. The new year-end target is 1.47, but a full trade war scenario could still drive USD/CAD toward 1.60. Markets are currently pricing in a more stable outlook, but uncertainty remains high.

March 14 (Reuters) - GBP/USD slipped on Friday, rounding off what has been a week of consolidation, with a surprise contraction in the UK GDP figures -- -0.1% vs 0.1% expected -- providing a fresh reminder that domestic factors for sterling are far from favourable. On the positive side for the pound, cable has continued to ride the coattails of the euro, which received a renewed bid after German parties reached an agreement over major debt package. However, as the UK Budget update draws closer – March 26 -- unwinding sterling exposure is likely to pickup leading into the event. The noise surrounding a fresh set of spending cuts only adds to the bearish sentiment.

Growth has been soft and as a result, the OBR’s 2025 GDP forecast of 2% in October looks certain to be downgraded. The fiscal divergence between the UK and Germany suggests that EUR/GBP higher will be among the better expressions of trading a weaker sterling, with a view to break above 0.8500.

Prior to the budget announcement, however, next week will see the release of the Bank of England’s March decision. While no rate cut is expected, the vote split will be under greater scrutiny following last month’s surprise split, whereby two officials -- Catherine Mann, previously a staunch hawk, and dove Swati Dhingra -- voted to cut the bank rate by 50bps. That said, with the inflation data leaning a touch more hawkish since the prior meeting, officials are likely to largely reiterate their cautious and gradual stance. For cable, 1.30 remains elusive and even if we were to see a break, the aforementioned domestic struggles that the UK faces may well truncate the pair’s ability to sustain such a move above. If anything, a window of opportunity is opening up for a pullback, which could see a retest of the 200-day MA at 1.2792.
GBPUSD daily chart

(Justin McQueen is a Reuters market analyst. The views expressed are his own.)

Synopsis:

SocGen expects EUR/USD upside momentum to slow, as markets may have overpriced a US slowdown that has yet to materialize. While Europe’s growth prospects have improved due to expected defense spending, the FX market may have moved too far ahead of fundamentals. As doubts emerge over the extent of US economic weakness, EUR/USD may pause and consolidate rather than continue its sharp rise.

Key Points:

1️⃣ EUR/USD Back to November Levels, But Fundamentals Differ 📊

• US growth forecasts for 2025 are now 1% higher than in November.
• Eurozone growth forecasts are 0.3% lower, despite fiscal optimism.

2️⃣ Market May Be Overpricing US Slowdown 🇺🇸

• Trump’s policy actions will hurt growth, but the extent remains uncertain.
• Markets have assumed a significant slowdown that hasn’t happened yet.

3️⃣ EUR/USD Rally Needs to Slow & Let Reality Catch Up 🔄

• The FX market is forward-looking, but moves may have been too aggressive.
• Some pullback or consolidation is likely as investors reassess economic expectations.

Conclusion:

SocGen sees EUR/USD momentum fading in the near term as markets reassess US economic risks. While European fiscal expansion is a positive, the US slowdown narrative may have been overstated, suggesting a more measured pace for further EUR gains.

Synopsis:

ANZ sees risk sentiment as the primary driver for both AUD and NZD, with negative sentiment weighing on both currencies despite a weaker USD. The ANZ Risk Appetite Index has hit its lowest level since late 2022, but historically, such deep pessimism has preceded strong recoveries in AUD and NZD. While short-term positioning remains bearish, a sentiment rebound could help both currencies recover against EUR and GBP, with NZD in particular at risk of a short squeeze due to extreme short positioning.

Key Points:

AUD Outlook 🇦🇺

1️⃣ AUD Struggles Despite Weaker USD 📉

• Fails to hold above 0.63, pressured by weak risk appetite.
• ANZ Risk Appetite Index at its lowest since late 2022, surpassing the 2024 carry trade unwind.

2️⃣ Market Positioning Still Bearish 💵

• CFTC data shows an increase in AUD/USD short positions.
• ANZ-observed spot flows confirm net AUD selling despite USD weakness.

3️⃣ February Labor Data in Focus 📊

• A strong jobs report could help AUD marginally, reinforcing the RBA’s cautious approach to rate cuts.
• Markets still price in a May cut, but ANZ sees only one cut in 2025 (August).

4️⃣ Near-Term Neutral on AUD/USD, But Scope for GBP & EUR Gains 🔄

• While AUD/USD may remain stuck, AUD has room to recover against GBP and EUR.

NZD Outlook 🇳🇿

1️⃣ NZD Lags on Crosses Amid Weak Sentiment 📉

• Like AUD, risk sentiment remains the key headwind.
• Net short NZD/USD positions hit a record high and have persisted at these extreme levels all year.

2️⃣ Q4 GDP in Focus, But Recovery Still Weak 🏦

• New Zealand’s economic data surprises are the weakest in the G10.
• RBNZ easing hasn’t fully filtered through, keeping GDP growth weak.
• Business surveys suggest a gradual recovery, but this isn’t yet reflected in headline data.

3️⃣ Short Squeeze Risk for NZD/USD 🔄

• Positioning is extreme, making a "short squeeze" rally a real possibility.
• If sentiment improves, NZD/USD could move higher quickly.

Conclusion:

ANZ remains neutral on AUD/USD near term but sees potential for AUD to recover against GBP and EUR. NZD remains heavily shorted, making it vulnerable to a short squeeze rally, particularly if risk sentiment improves. Market focus will be on Australian labor data and New Zealand's Q4 GDP for near-term direction.

(Corrects spot gold price at 1012 GMT in bullet 2 to $3,000/ounce, not $3,000.71/ounce)

• Shares of gold miners rise, tracking prices of bullion [GOL/]

• Spot gold rose above $3,000/ounce at 1012 GMT (6:12 a.m. ET), hitting a record high, and going as high as $3,004.86/ounce, due to uncertainties around U.S. tariffs on imports and expectations of a rate cut by the Federal Reserve

• Bullion has scaled 13 all-time highs so far this year and is on track for a second straight week of gains

• Shares of top miners Newmont and U.S.-listed shares of Barrick Gold up around 1% each

• U.S.-listed shares of Canadian miners Kinross Gold and Agnico Eagle Mines up 1.3% and 1%, respectively

(Reporting by Seher Dareen in Bengaluru)

• EUR/USD met sellers after breaking Nov 5-6 1.0937 double top Tues

• 1.0947 high was 10-pips shy of key 76.4 Fibo of 1.1214-1.0125 drop

• Option barriers/triggers at 1.1000 thereafter. Setback based 1.0823 Thur

• More support at 10-7-6 Mar lows 1.0805-1.0782-66 before 200-dma 1.0723

• Mild demand takes EUR/USD back to 1.0858 Fri. Options signal range trade

• Big expiries surround price on Friday - 1.0815-25, 1.0850, 1.0870-75
EUR=EBS

(Richard Pace is a Reuters market analyst. The views expressed are his own)

March 14 (Reuters) - FX options serve as a valuable hedge against market volatility, so it was no surprise that USD/JPY option premiums outpaced those of their peers amid recent spot market turbulence. However, USD/JPY has led a broad-based decline in FX option premiums over the past few sessions, bringing current levels into an attractive reward-versus-risk zone.

FX volatility is a critical but unpredictable component of an option's price, prompting dealers to use implied volatility as a proxy. If realised volatility exceeds implied volatility over the option's lifespan—or if implied volatility rises—options can generate profits.

To monetise FX volatility and remove currency risk, the option position must be offset with an opposing and constantly adjusted cash hedge.

For context - the benchmark 1-month expiry USD/JPY implied volatility reached a new 2024 high at 12.4 this week from 10.35 in late February. It has since fully retraced that move, significantly reducing the premium for 1-month expiry options.

There is plenty of FX volatility event risk within the next month to justify holding a 1-month expiry option to capture it. Next week sees central bank policy announcements from the Bank of Japan and U.S. Federal Reserve. The U.S. global reciprocal tariffs on April 2, the monthly U.S. jobs report on April 4 and U.S. CPI data on April 10.

FX options wrap
USD/JPY FXO implied volatility

(Richard Pace is a Reuters market analyst. The views expressed are his own)

• EUR/USD huge gains last week broke and closed above the 1.0798 Fibo

• 1.0798 Fibo, is a 61.8% retrace of 1.1214-1.0125 (Sept-Feb) EBS drop

• The weekly close above the 1.0798 Fibo added to the bullish bias

• 14-week momentum turned positive last week, highlighting to bullish bias

• However, this week spot faltered ahead of 1.0957 Fibo, 76.4% of same fall

• Offer at 1.0890. EUR/USD Trader . Previous update

Weekly Chart:


Daily Chart:

(Martin Miller is a Reuters market analyst. The views expressed are his own)

• Cable falls to 1.2927 intra-day low on unexpectedly negative UK Jan GDP

• Minus 0.1% vs plus 0.1% forecast. 1.2938 was Asia low (pre-UK GDP data)

• 1.2927 is six pips shy of Thursday's low (1.2914 was Wednesday's low)

• BoE is still expected to keep rates unchanged next week, despite GDP miss

• Fed also seen on hold next week. 1.2990 was 18-week high on Wednesday

• Schumer signals Democrat support for spending bill to avert govt shutdown

GBPUSD

(Robert Howard is a Reuters market analyst. The views expressed are his own)

• USD/JPY continues to grind higher on pre-weekend short-covering

• Despite the move up, market still seen very long JPY

• USD/JPY from 147.42 low in New York and 147.75 early Asia to 148.73

• Resistance eyed from ahead of 149.00, 149.20 spike high on March 12

• Dips will continue to bought with demand seen strong from around 148.00

• Large $830 mln in option expiries today between 147.85-148.00 to help?

• Moves in Japanese and US yields less of a factor today

• Related , , , for more click on [FXBUZ]

USD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

• AUD/USD edges towards previous week's 0.6306 close, looks resilient

• Sits above 55 DMA; hourly Bollinger band channel closing up

• Geopolitical/trade war concerns remain; plenty of events/data next week

• China industrial output (poll +5.4% y/y), retail sales (poll +4.0% y/y) Mon

• Fed outcome (1800 GMT) Wed, U.S. retail sales, ind'l output, trade also due

• AU employment Thur (prev +44k) begins series of key domestic updates

• AUD range Asia 0.6278-93, support 0.6260, resistance 0.6415
AUD


AUD 55

(James Connell is a Reuters market analyst. The views expressed are his own.)

• USD/JPY, JPY crosses leg up in Asia on Japan importer buys, short-covering

• Move began into today's de facto Gotobi Tokyo fix (15th tomorrow, Saturday)

• Spurt above top of hourly Ichimoku cloud, cloud now 147.87-148.33, tapering

• Descending 200-HMA 148.17 nearby, ascending 55-HMA 148.13, 100-HMA 147.75

• Market still seen very long yen, likely to limit retracements down

• Resistance/offers eyed from ahead of 149.00, 149.20 high Wednesday

• Option expiries today 147.85-148.00 $830 mln, some at 148.25 and 148.50

• Also 149.00 $618 mln, may help cap upside, Monday 149.00 $929 mln

• US yields up some from lows overnight, JGB yields remain on firm side

• EUR/JPY 160.58-96 EBS, looks to have found a bottom for now

• Some EUR/JPY option expiries today on 160 handle - 160.00-25, 160.65-75

• GBP/JPY 191.28-192.10, up from lows yesterday, some option expiries at 190

• AUD/JPY 92.75-93.30, in 91.78-94.71 range since March 6

• CHF/JPY 167.61-168.00 EBS in Asia, 169.00 CHF672 mln option expiries today

• Related comment , also ,
USD/JPY hourly:


EUR/JPY hourly:


AUD/JPY hourly:

(Haruya Ida is a Reuters market analyst. The views expressed are his own)

Synopsis:

ING remains bearish on GBP/USD, citing fiscal risks ahead of the March 26 UK Budget and ongoing concerns over UK gilt market stability. While a potential reset in UK-EU economic ties could be positive for long-term growth, it won’t provide much near-term fiscal relief. Despite possible short-term moves above 1.30 due to US macro noise, ING sees GBP downside risks prevailing.

Key Points:

1️⃣ UK Budget on March 26 Poses Risks for GBP 📉

• Concerns over fiscal headroom remain, as any UK-EU economic reset would have long-term, not immediate, effects.
• The gilt market is already under pressure, and spillover from EU bonds could worsen sentiment.

2️⃣ Key UK Data Releases Before the Budget 🏦

• January GDP (tomorrow) & February jobs data (next week) could impact short-term GBP moves.
• BoE expected to hold rates next week, but a dovish signal is likely, reinforcing GBP weakness.

3️⃣ Market Pricing in May/June BoE Rate Cuts 📊

• The BoE is seen cutting rates by mid-year, adding to GBP downside risks.

4️⃣ GBP/USD Moves Above 1.30 Likely Temporary 🔄

• Short-term fluctuations may push GBP/USD above 1.30, but ING expects the pair to struggle at those levels.

Conclusion:

ING remains bearish on GBP/USD, with fiscal uncertainty ahead of the UK Budget and BoE rate cut expectations weighing on sterling. While US macro factors could push GBP/USD above 1.30 temporarily, ING sees limited sustainability for GBP at those levels.

• Seven out of the top 10 performers in the ASX 200 benchmark index are gold miners

• ASX All Ordinaries gold index , comprising of 27 gold miners, rises 4% to trade at a record-high; benchmark up 0.4% as of 0216 GMT

• Gains in line with a rapid surge in gold prices as investors rush into the safe-haven assets amid tariff uncertainties; both spot gold and U.S. gold futures

within touching distance of $3,000 an ounce [GOL/]

• Genesis Minerals up 7.6%, trading at highest level since January 28, 2011; top performer in the benchmark

• ASX shares of Newmont Corp up 4.8% at a three-week high

• Westgold Resources and Bellevue Gold gain 4.9% each, trading at multi-week highs

• AXGD up 25.3% this year, including the day's moves, significantly outstripping the heavyweight ASX 200 Financials index , which is down 6.8%

(Reporting by Sameer Manekar in Bengaluru)

• XAU/USD steady in Asia, hovers near psychological and key milestone at $3000

• Rallied 1.9% Thu, hit a record $2981.31 on Trump's erratic tariff policies

• Boosted by rising fears of U.S. recession, expectations of Fed policy easing

• Lutnick says recession would be "worth it" to achieve Trump's economic goals

• Geopolitical concerns, doubts on Ukraine ceasefire contribute to bid tone

• Demand from major central banks continues to support gold

• China's central bank ups gold reserves for 4th straight month in February

• Rally above $3000 may lead to acceleration; support $ 2950-2955

• Thursday range 2931.58-2989.31; Asia range 2981.79-2989.46
What Americans think about tariffs:


US recessions: how bad was it for inflation?:

(Krishna Kumar is a Reuters market analyst. The views expressed are his own.)

• Australian gold stocks rise 3.3% to 10,504.7 points, hitting a record high

• The sub-index rises on the back of soaring bullion prices, which also hit an all-time high, helped by elevated tariff uncertainty and bets on monetary policy easing by the U.S. Federal Reserve [GOL/]

• AXGD rose 3.7% earlier in the day to log its biggest intraday gain since February 11

• Gold stocks up for a third consecutive session

• Shares of Northern Star Resources rise over 3.1%, their biggest intraday pct gain since February 11

• Evolution Mining up as much as 3.75 to hit a record high

• AXGD up 24.7%, YTD

(Reporting by Adwitiya Srivastava in Bengaluru)

• Steady after falling 0.25% on Thursday with the safe-haven USD up 0.25%

• Putin suggests U.S. ceasefire idea for Ukraine needs serious reworking

• Trump threatens tariffs on European wine and spirits in escalating trade war

• Initial German stimulus negotiations pose more questions than answers

• Considering all the negative EZ news the EUR showed resilience

• Charts- 5, 10 & 21-day moving averages climb, as 21-day Bolli bands rise

• Neutral daily momentum studies - daily signals retain the topside bias

• Thursday's 1.0897 top, then the 1.0937 Nov 2024 high are first resistance

• This week's 1.0805 low, and then the 1.0722 200 DMA are initial supports

• 1.0850 1.1156BLN March 14th strikes may act as a magnet in Asia
Andy

(Andrew Spencer is a Reuters market analyst. The views expressed are his own.)

• AUD/USD lower overnight as EUR dipped and U.S. equities continued to slide

• German spending package optimism wavered, acceptance debate ongoing/vote Tue

• Failure would leave formation of a conservative/SPD coalition in disarray

• Trade concerns continue; Trump threatened 200% tariff on EU alcohol imports

• Benign U.S. data overnight; China industrial output, retail sales due Mon

• AUD trading toward bottom of weekly range, support 0.6260, resistance 0.6415

• Overnight AUD range 0.6269-0.6301
AUD mng

(James Connell is a Reuters market analyst. The views expressed are his own.)

Synopsis:

Morgan Stanley expects UK GDP to contract by 0.1% MoM in January, following a strong December rebound that came after a series of weak months. Despite this pullback, the bank tracks 0.2% QoQ growth for Q1 2025, suggesting modest economic momentum remains intact.

Key Points:

1️⃣ December GDP Was Strong But Followed a Weak Trend 📊

• December saw a solid rebound, but prior months were disappointing.
• Some correction in January is likely.

2️⃣ January GDP Expected to Decline by 0.1% MoM 📉

• A mild contraction expected after December’s strength.

3️⃣ Q1 2025 Growth on Track for 0.2% QoQ 🔄

• Despite the January dip, the economy is still expected to expand modestly in Q1.

Conclusion:

Morgan Stanley sees a slight January GDP decline (-0.1% MoM) as part of a correction after December’s strength. However, overall Q1 2025 growth remains positive, with 0.2% QoQ expansion expected.