NZD: Pulls Back To 20, 50 Day EMA Support As Equities Resume Decline

Bloomberg reported that there was a US oil stock build of another 9mn barrels last week, according to people familiar with the API data. Flows from Canada have been ramped up to beat any tariffs. They rose 400k at the Cushing hub. Product inventories were lower with gasoline down 2.5mn and distillate 600k. The official EIA data is out later today.

AUDUSD broke through 63c briefly in late Tuesday trading reaching an intraday high of 0.6302, 50-day EMA, with better equity sentiment supporting risk-sensitive Aussie. The pair trended higher through the day as the greenback weakened (USD BBDXY -0.3%) and is now up 0.3% to 0.6295. Markets didn’t seem concerned by upcoming US steel/aluminium tariffs.

• Despite this week’s rise in AUDUSD, the trend structure remains bearish with initial support at 0.6171, 4 February low. Initial resistance is at 0.6302, just above where AUDUSD is trading currently.
• The yen underperformed the G10 leaving AUDJPY up 0.6% to 96.02 but still down 0.4% this month.
• AUDNZD held above 1.11 through Tuesday falling to a low of 1.1115 and then recovering to be flat on the day at 1.1131.
• The pound was one of the outperformers and AUDGBP is down 0.35% to 0.5058. AUDEUR is 0.2% lower at 0.6076.
• The S&P was little changed while the Euro stoxx rose 0.6%. Oil prices were stronger with Brent up 1.3% to $76.87/bbl. Copper fell 2.4% and iron ore is lower around $106/t.
• The new quarterly home lending data for Q4 is released today. It is replacing the monthly series. 

Yen continued to unwind recent outperformance. The JPY lost 0.30% for Tuesday's session, which along with CHF was the only G10 currency to lose ground against the USD. Other majors led by the Euro area and GBP rose against the USD. The BBDXY and DXY indices fell by around 0.25-0.35% For Tuesday's session. 

• USD/JPY tracks near 152.45/50 in early Wednesday dealings, close to Tuesday highs (152.61). A firmer core yield backdrop, coupled with higher global equities, although US markets lagged, weighed on the yen.
• GBP was supported by hawkish BoE rhetoric, GBP/JPY rebounded back towards 190.00, the pair up nearly 1.0%. EUR/JPY rallied back to 158.00, correcting from last week's 3% drop. However, firm resistance is not seen until the 20-day EMA and the significant pivot level of 160.00.
• For USD/JPY there is scope for the pair to correct further to the topside, given the powerful move lower last week and additional profit taking dynamics potentially in play ahead of the US CPI release later US Wednesday time. 152.89 (Jan 6 high) and 153.72 (Jan 27 low) are levels to watch on the topside. Support to watch on the downside is 150.93, the Feb 7 low.
• Local markets return today, with Jan money stock figures and preliminary machine tool orders data out (Jan).
• In the option expiry space, note the following for NY cut later: Y151.75($566mln), Y153.00-15($884mln), Y153.50-70($1.7bln), Y155.30($560mln).