New Zealand Electronic Card Retail Sales MM (Feb) -0.3% vs. Exp. 0.10% (Prev. 1.4%). (Newswires)
New Zealand Electronic Card Retail Sales YY (Feb) 3.3% (Prev. 3.4%)


UK government officials reportedly does not see a Brexit deal being reached until next year. (Newswires)

UK PM May stated that the EU estimate of customs loss is an overestimation and the UK does not recognize it. (Newswires)

UK Foreign Secretary Boris Johnson said a no-deal Brexit should not hold any terrors for UK as the country would thrive under WTO rules. (Telegraph)


ECB kept rates unchanged as expected and dropped pledge to increase size and/or duration of QE purchases.

Refinancing Rate: 0.00 %
Deposit Rate: -0.40%
Marginal Rate: 0.25%

The phrase dropped by the ECB was: “If the outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council stands ready to increase the asset purchase programme (APP) in terms of size and/or duration.”

ECB GROWTH PROJECTIONS: GDP in 2018 +2.4% (Prev. +2.3%), +1.9% in 2019 (Prev. +1.9%), +1.7% in 2020 (Prev +1.7%)
ECB HICP PROJECTIONS: HICP 1.4% in 2018 (Prev. 1.4%), 1.4% in 2019 (Prev. 1.5%), 1.7% 2020 (Prev. 1.7%).

ECB’s Draghi said growth will expand by a somewhat faster pace than earlier expected but repeated that inflation is still to show signs of a sustainable move upwards and remains subdued. Furthermore, Draghi added that ample monetary accommodation still required to secure a return of inflation to target. (Newswires)

ECB staff calculations on future path of monetary policy assume asset purchases of EUR 30bln in Q4, according to Euro area officials, sources report; broad agreement on GC that QE will come to a halt by the end of 2018. (Newswires)


CAD and MXN outperformed a strengthening USD after the Associated Press reported that Mexico and Canada would be indefinitely exempt from tariffs, sending both currencies to session highs against the greenback. DXY also extended gains on the news, breaking above 90.000; CAD found support at 1.29, though testing the week’s lows around 1.2850 proved too much ahead of Trump’s official statement; The MXN, meanwhile, rose to week-highs against the buck.

A volatile EUR finished lower after a masterful balancing act by ECB president Draghi, who managed to hawkishly tweak forward guidance on QE, though struck a dovish message in his post-meeting presser. The result was the EUR falling, breaching 1.23 to the downside in late US trade. The focus for EURUSD now falls on the USD part of the pair, with Trump to detail steel/aluminium tariffs later on Thursday, and tomorrow’s NFP (specifically the wages data) in focus.

Ahead of the BOJ meeting overnight, USDJPY has largely stayed out of trouble, refusing to participate in the choppy FX trade, patrolling a range between 105.90 to 106.25.

GBP was always on the back foot amid the USD strength. But there were also idiosyncratic reasons for the pounds slippage in late trade, after reports said UK govt officials don’t see a #Brexit deal being reached until next year, which pushed GBPUSD beneath 1.38 to session lows, though EURGBP seemed more reticent about another test of 0.8850, given the generally EUR weakness post-ECB today. Some desks are targeting have been targeting a full correction of GBP (from 1.4350 region) to 1.3650; earlier in the day, some desks were reported to have been interested in adding shorts on a break of 1.3850.


Motiva’s Port Arthur largest US refinery and is increasing production on big crude unit after it has restarted


US President Trump confirmed 25% tariff on steel and 10% on aluminium, while the US will hold off tariffs with Canada and Mexico until NAFTA talks. US President Trump was said to be open to modifying tariffs with individual countries and will review other military allies for tariff exclusions, while he also wants a reciprocal tax programme at some point. (Newswires)
Note: There were earlier reports that AP Sources suggested tariffs are to take effect in 15 days with Canada and Mexico to be exempted indefinitely from the tariffs, while Trump had earlier commented that it is likely Canada and Mexico will not have tariffs if a deal is reached. (Newswires)


US stocks bounced to fresh session highs in late trade after AP reported that Canada and Mexico would be indefinitely exempt from Trump’s steal/aluminium tariffs, spurring risk sentiment as traders welcomed a watered-down version of trade wars. However, the gains proved fleeting, and after Trump began his announcement, the sellers returned, as the trade war narrative gripped the news cycle. SPX +0.4%, DJI +0.4%, NDX +0.5%.

Treasuries seemed blasé about almost everything ahead of tomorrow’s payrolls data, and it was another subdued day with limited price action. For parts of the early day, Tsys were following their German counterpart during the ECB press conference. Moves were muted, but the net impact was a compression of the spread between the two. As expected, the US Treasury said it would auction $62b in 3s/10s/30s next week. US T-note futures settled up 5ticks at 120-25+.