Forex Today: AUD capped by China trade shock, UK Budget in focus

Risk-off trades prevailed in Asia for the second straight session today, as poor Japanese Q4 GDP report and China’s trade deficit news spooked markets. Safe-havens such as the yen emerged the top gainer, while the Aussie’s bullish move stalled just ahead of 0.76 handle amid renewed concerns over the Chinese external demand, as exports witnessed a bid miss.

Meanwhile, the trading activity around the US dollar and treasury yields remained largely subdued, as investors now await Friday’s labor market report from the US for fresh direction.

Later today, calendar-wise, the German industrial production data will be reported ahead of the European open, followed by the UK Annual Budget release in late-Europe. The US docket offers the ADP jobs, revised nonfarm productivity data and EIA crude oil inventories report.

Main topics in Asia

Japan data: Capex rose at fastest rate in nearly three years

The capital expenditure component of GDP rose 2% from the previous quarter and was higher than the estimated figure of 1.7%. This was the fastest pace since Jan-Mar 2014 (2.3%).

Saudi OilMin: We'll seek an extension of the cuts deal in May

More headlines crossed the wires earlier today from the Saudi Arabian oil minister Khalid A. Al-Falih, as cited by Reuters.

China’s Feb trade data (Yuan terms): A big miss on Imports jump

China's trade balance for February, in Yuan terms, came in at -60.4 billion CNY vs 172.5bn expected and 354.5bn last. Exports came at 4.2% y/y vs 14.6% expected and 15.9% last, while imports were +44.7% y/y vs 23.1% expected and 25.2% last.

Terrorist attack reported at military hospital in Kabul - RTRS

Reuters reporting a terrorist attack at military hospital (Sardar Mohammad Daud Khan Hospital) in Kabul, Afghanistan. The hospital, apparently, is very close to the US embassy.

Key focus for the day ahead                                                     

EUR/USD side-lined near 1.0560 ahead of German data

The immediate focus now remains on the German industrial figures due ahead of the Europe open. Also, the US ADP jobs report will be closely eyed for fresh cues on Friday’s NFP report.

Fed March Rate Hike Already Priced in as Markets Await ADP Payrolls

The ADP Non-farm employment report will be published on Wednesday, March 8 at 8:15 am EST (1:15 pm GMT). The forecast calls for 184,000 news jobs added in February.

ECB: Draghi to hold the line on dovish policy outlook - AmpGFX

According to Greg Gibbs, Director at Amplifying Global FX Capital, headline inflation has jumped sharply to surpass the ECB’s medium-term target for the first time since Jan-2013 which may be generating some thoughts of a less dovish ECB statement on Thursday.

GBP/USD struggling near multi-week lows ahead of UK budget statement and US ADP report

Chancellor Paul Hammond will present the statement later during European session and market focus would be on what he would do to shield the UK economy from the potential impact of Brexit.