Cypriot parliament vote no ahead of the UK budget and FOMC announcement

The single currency languishes around the 1.2900 handle, trading a low of 1.2856 overnight following the overwhelming rejection in the Cypriot Parliament to tax Cypriot depositors. Of its 56 members, 36 voted no, with the remaining 20 abstaining from the vote with rumours following that the Cypriot finance minister had tendered his resignation. Cypriot banks are now likely to remain closed now until next week as the Cypriot parliament looks to rehash the classic Greek drama of 2012.

The event calendar today has all the hallmarks of high volatility, with the Cypriot headlines likely to dominate but it’s a big day for the not so proud pound and the US dollar. This morning at 9.30am GMT UK jobs data will be released, with the unemployment rate looking to remain unchanged at 4.7% and claimant count looking to have increased by 5k following the 12.5k increase last month. More importantly, the MPC minutes will be revealed at the same time with the market looking to see if the recent stronger services PMI data has changed the voting pattern with a 7-2 vote likely to see GBP rally with a closer 5-4 outcome to appease the bears. The UK chancellor will then take centre stage at 12.30pm GMT, with the markets awaiting his post budget speech following media speculation that  ‘cabin boy George’ will give incoming BoE governor Mark Carney a new remit heading down the Fed’s path of fiscal targeting.

The day will then conclude with the FOMC decision followed by a press conference by Fed Chairman Bernanke. The consensus is that the FOMC will not alter the pace of QE with the market looking for signs of optimism about the economic outlook following the recent robust data releases.

Japan are celebrating equinox day but tomorrow the new BoJ governor will be holding his first press conference, with the market expecting an announcement on new aggressive policy measures.

EUR/USD

Supports 1.2800-1.2710-1.2660 | Resistance 1.2925-1.2965-1.3000

USD/JPY

Supports 94.80-94.05-93.70 | Resistance 95.80-96.30-97.20

GBP/USD

Supports 1.4980-1.4925-1.4835 | Resistance 1.5125-1.5220-1.5280