SNB:

• SNB cuts key policy rate by 25 bps to 1.50% from 1.75% previously
• Swiss franc tumbles after SNB surprises with a rate cut today
• SNB chairman Thomas Jordan says rate cut is not a parting gift

Headlines:

• Treasury yields retreat further post-Fed but nears key technical juncture
• Gold still on cloud nine ahead of European morning trade
• France March flash services PMI 47.8 vs 48.7 expected
• Germany March flash manufacturing PMI 41.6 vs 43.1 expected
• Eurozone January current account balance €39.4 billion vs €31.9 billion prior
• UK March flash services PMI 53.4 vs 53.8 expected

Markets:

• AUD leads, CHF lags on the day
• European equities higher; S&P 500 futures up 0.4%
• US 10-year yields down 3.8 bps to 4.233%
• Gold up 0.9% to $22,06.43
• WTI crude down 0.3% to $80.50
• Bitcoin up 0.1% at $67,170

As the window of opportunity is opening up for central banks to cut rates, the SNB is not waiting around to make its move. The Swiss central bank surprised with a 25 bps rate cut today and the franc fell as a result. We all knew that there was a chance that they could have surprised markets, but traders were caught wrongfooted after having priced in the first move for June instead.

EUR/CHF rose to its highest since July last year from 0.9680 to 0.9780, before easing back to 0.9740 now. Meanwhile, USD/CHF surged up to its highest levels for the year at 0.8975 before retreating to 0.8930 – still up 0.7% on the day.

Besides that, euro area PMI data saw some mixed readings for March. The manufacturing sector remains in recession but a stronger services sector is at least helping to stabilise the economy in general. The euro slipped with EUR/USD falling from 1.0920 to 1.0888 before sticking around 1.0900 with large option expiries also helping out.

As for the dollar itself, there was some post-Fed weakness during Asia trading. But that has dissipated somewhat in European morning trade so far, despite lower Treasury yields. USD/JPY was as low as 150.26 in Asia but has rebounded back to 151.10 now, down just 0.1% on the day.

In the equities space, stocks remain buoyed as European indices are sitting higher for the most part. US futures are also gaining further after the record closes in Wall Street yesterday.

And in the commodities space, gold continues to hold at fresh record highs above $2,200 as it consolidated gains above the figure level during the session.

This article was written by Justin Low at www.forexlive.com.

• Industry in particular will likely remain in a weak phase
• No major stimulus is expected from private consumption for the time being either
• Uncertainty over major issues, like climate policy, also weighing on investment decisions
• Inflation could fall further in the months ahead
• But some fluctuation is likely as services inflation is coming down rather slowly

The PMI data earlier today here reaffirms the above sentiment.

This article was written by Justin Low at www.forexlive.com.

Yesterday, the Fed left interest rates unchanged as
expected with basically no change to the statement. The market was fearing some
hawkish stuff, but we didn’t get any. In fact, the Dot Plot showed still three
rate cuts for this year and the economic projections were all upgraded with
growth and inflation higher and the unemployment rate lower. Moreover, during
the press conference, Fed Chair Powell didn’t
sound hawkish, on the contrary, he was fairly neutral. This gave the Dow Jones
the green light for a rally as the risk sentiment turned very bullish.

Dow Jones Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Dow Jones surged
to a new all-time high following the Fed decision. This is a buyers’ market, so
the sellers should refrain from taking new positions until we get a change in
the risk sentiment and some key breakouts on the lower timeframes. We can also
notice that the price continues to diverge with the
MACD which is
generally a sign of weakening momentum often followed by pullbacks or
reversals. In this case, it should be telling that the buyers should buy the
higher lows instead of FOMOing at higher highs.

Dow Jones Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price broke through the 39119 resistance and
triggered a strong bullish reaction as the buyers piled in aggressively for a
new all-time high. From a risk management perspective, the buyers will have a
much better risk to reward setup around the resistance now
turned support where there’s also the 38.2% Fibonacci
retracement level for confluence. The
sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 38464 level.

Dow Jones Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
also have a minor trendline around the support zone where the buyers will
likely lean onto to position for new highs with a better risk to reward setup.
The sellers, on the other hand, will want to see the price breaking lower to
position for a drop into the 39464 level.

Upcoming Events

Today we will get some key economic data as we will
see the latest US Jobless Claims figures and the US PMIs.

This article was written by FL Contributors at www.forexlive.com.

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This article was written by FL Contributors at www.forexlive.com.

After nearing the highs for the year earlier this week, 10-year Treasury yields have come down a fair bit. The move lower was helped by a more dovish Fed yesterday, with the rebound last week now resembling a double-top pattern. But as yields retreat, they are nearing a key technical juncture on the chart as well.

Yields are now at 4.229% and are nearing the confluence of its 100-day (purple line) and 200-day (green line) moving averages at 4.204% to 4.220%.

A fall below that will see bond buyers seize back control with yields potentially slipping back to the March lows near 4.09%. But if yields hold above the key technical region, that might keep dollar selling more limited for the time being.

So far today, the drop in yields isn’t weighing on the dollar all too much. The greenback was softer in Asia trading but has recovered some decent ground so far in Europe.

USD/JPY is a good example of that, now trading near 151.00 after having hit a low of 150.26 earlier in the day. It is off earlier highs just a few hours ago at 151.45 though as yields start to retreat further now.

This article was written by Justin Low at www.forexlive.com.