BoE inflation report this morning ahead of retail sales

<p>The global bond markets continue to dominate FX markets, with the German 10 year Bund rally leading global yields and the Euro higher as investors […]</p>

The global bond markets continue to dominate FX markets, with the German 10 year Bund rally leading global yields and the Euro higher as investors question if this is a change in recent market sentiment and that the reflation trade is actually a significant possibility, or is the bullish price action nothing more than a position adjustment.

The NZD was again in focus in the Asian session following the ‘birds’ recent poor performance as the market prices in RBNZ rate cuts to stimulate the inflation picture. The RBNZ financial stability report caught a bearish market on the back foot as the report failed to adopt any solid macro-prudential measures aimed at cooling the Auckland housing market, as the language on the NZD was seemingly softened with the removal of ‘unjustified’ from the statement to describe the currency strength.

The UK will take centre stage this morning with labour market data and in particular wage growth data released at 9.30am this morning. However, all eyes will be on the quarterly inflation report at 10.30am to see whether the BoE will signal a more hawkish tone to that of the February report, although the recent data suggests the MPC will refrain from sounding overly hawkish.

US retail sales will be the highlight of the session and possibly the week as investors will look to the data to give further evidence that a US Q2 growth bounce back is materialising following a mixed labour report last Friday.



 1.1130-1.1055-1.0965 | Resistance 1.1285-1.1400-1.1530



119.00-118.20-117.50 | Resistance 120.60-121.55-122.00



Support 1.5290-1.5150-1.5070 | Resistance 1.5725-1.5785-1.5875

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