USD traders eye $179bn in US Treasury auctions

The G-10 rundown

USD – the US dollar is looking a bit peppy ahead of pivotal auctions today as we discuss above. We focus on USDJPY as especially interesting over these auctions, particularly the 107.50-108.30 zone and whether this provides resistance.

EUR – EURUSD is trading heavy with a decent US Treasury auction today; a close below 1.2300 is needed to suggest that bulls are going to have to sit on their hands a bit.

JPY – the USDJPY move lower was the biggest development among major USD pairs last week and the move needs to find resistance over the next couple of days in the 107.50-108.30 zone to suggest the trend remains intact.

GBP – GBPUSD couldn’t hold 1.40 and EURGBP is locked in the vice grip of the 0.8700-0.8900 range. Not sure where the next short-term catalyst is for GBP other than technical breaks...

CHF – wondering if the March 4 date is holding back EURCHF (German SPD vote on whether to approve the Grand Coalition and the Italian election). We suspect that the 200-day moving average, now above 1.1400, could come under pressure if risk appetite deteriorates again.

AUD – AUD firmed a bit on the Reserve Bank of Australia minutes overnight, though these deserve little discussion as the RBA continues to suggest that inflation recovery will be slow and Q4 wage growth will likely be at a 2.0% year-on-year rate. The only leg of the stool holding up the AUD is the commodity basket associated with Australia’s mining industry.

CAD – USDCAD looks buoyant, but needs to work above the 1.2600-50 zone to excite more bullish attention. A cocktail of US Treasury auctions and yields, risk appetite, oil prices, and the Canadian CPI release on Friday will determine the outlook – we’re constructive on the upside on a close above the pivot zone.

NZD – AUDNZD has found support recently in a sloppy test of a big 61.8% Fibonacci retracement and the kiwi has looked relative weak over the last couple of sessions, but the selling needs to deepen to suggest any larger selloff is finally underway.

SEK – the Swedish CPI print is up this morning and it's usually a market mover. A weak number and a backdrop of deteriorating risk appetite are the most negative scenario and could set EURSEK on the path to 10.00-plus again, while the key downside pivot looks like 9.85-80 and would need an inline or higher CPI print and continued calm.

NOK – EURNOK is precisely back to mid-range and needs to make a directional commitment soon, as does crude oil. Norway’s short rates have shifted significantly higher over the last week, perhaps providing some of the boost in NOKSEK, which is looking interesting for an upside break again after failing the previous attempt (note Swedish CPI release today as a key factor).

Upcoming Economic Calendar Highlights (all times GMT)

   • 0830 – Sweden Jan. CPI
   • 1000 – Germany Feb. ZEW Survey
   • 1130 – Sweden Riksbank’s Floden to Speak
   • 1800 – US 2-Year Note Auction
   • 2300 – New Zealand RBNZ Governor Spencer