 Welcome to Tick-Mail Weekly Market Outlook for week commencing the 22nd of March with me, Patrick Munley. Despite a dubbish FOMC meeting, the key takeaway from the event was a comment that the Fed had left the long end of the US Treasury market unprotected. Subsequent spike in the US 10-year yields to 1.75% certainly proved that point and fears of a disorderly sell-off in treasuries still stalled the FX market. On that subject, FX markets will be starting this new week nervous about US treasuries once again and the Fed has decided not to extend the US Treasury exemption to the supplementary leverage ratio. The US data calendar over the coming week is relatively limited, February personal income data will not repeat the bounce of January, but should surge in March as the $1400 stimulus checks hit bank accounts. We'll also see a lot of Fed speakers including Fed Chair Powell testifying on Tuesday and Wednesday alongside Treasury Secretary Janet Yellen. The DXY remains supported largely by the sluggish roll-out of vaccines and new lockdowns in Europe. Remember that European FX has a 77% weight in the DXY, but arguably DXY should have done better given the 70 basis point rise in US 10-year yields this year and the fact that it hasn't does continue to lend weight to the preferred bearish stance in terms of the dollar. From a technical perspective, the dollar index held resistance at the 92 level again on a closing basis, although we did trade through there on Friday but closed back below. As this 92-16 area continues to act as resistance, I'm looking at least for a test of the monthly pivot down to 1973 and monthly projected range support at 1960 through here and we could be back down testing the psychological 90 level. At this stage, only a close through 92-54 would open a test of the yearly pivot up to 94-11. Europe's handling of the Covid-19 crisis certainly seems to be taking its toll on Europe. Third waves now look like a reality for the likes of France and the Netherlands and Italy, triggering fresh lockdowns and delaying the day when Europe can play its part in the global recovery. The slow roll-out of vaccines and safety concerns over the AstraZeneca vaccine clearly have not helped either. Moving to the calendar this week on Monday, the focus will be on how much the ECB increased its pet bond buying, an increase in net weekly buying to above the 20 billion Euro would be seen as a sizeable and could provide some support to European debt markets and perhaps even slow the rise in US yields. Data-wise the highlights will be the first look at March PMIs for the larger European economies and the German EFO reports. Let's see whether any optimism in the lagging services PMIs starts to come through. We will also see a host of ECB speakers. News that parts of Europe are heading back into lockdown did weigh on the Euro into the back end of last week, but again we have held this 185 support zone. As we do, I'm looking for prices to extend higher to test the monthly pivot, 128.5 and monthly range resistance at 121.24. At this stage, only a loss of the monthly range support at 118.24 would see prices extend lower to test the yearly pivot down to 117.25. It will be a busy week on the data front in the UK next week, but after the March BOE meeting last week where the central bank did not lean against higher bond yields, these should have limited impact on sterling. March CPI on Wednesday is set to increase modestly, but we need to wait until able to see more meaningful jumping prices. The January unemployment rate on Tuesday should remain stable and March Service PMIs on Wednesday should move back to expansionary territory, but February retail sales on Friday are expected to only partially recover after January's sharp fall. Overall the UK data releases this week should be no real game changer for sterling. The UK continues to trade above the 138 support area as this level continues to attract buyers. I'm looking for prices to extend back up to 140.50 on route to a retest of the price cycle highs at 140.239 and ultimately on towards the 144 target. At this stage, only a loss of that 137.50 trend line support area would concern the bullish thesis and C prices extending back down to retest support to 134.85. Neither the Dolly Yen nor Japanese rates markets move much on the BOJ's policy review, which it seems was aimed at more flexibility. More flexibility in JGB yields, plus or minus 25 basis points around 0%, though the BOJ claims this was unchanged. More flexibility in stop buying, no longer a target and now purchasing ETFs on the broader topics, and more flexibility to cut rates, changing's made on its three tier reserve ratio exemptions. Perhaps the balance was about right, such that the market did not jump to the conclusion that the BOJ was ready to normalise policy. Expect Dolly Yen to continue to trade off US yields for the time being, though again expect to hear survey reports of Japanese lifers increasing hedge foreign bond portfolios and reducing unhedged foreign portfolio bond weightings on the subject of US yields. Market watchers point out that we will not see another round of long dated treasury supply until the second week of April. So whilst we hold resistance here at 109.30, I'm looking for a down to test support at 108. From this 108, I'm looking for a final extension up through into the target area of 110, and I think from there we can see a more meaningful correction develop where we can be back trading into the 107 area. But the immediate focus is going to be on support at 108 to target a move to the 110. The Aussie dollar saw a number of domestic inputs last week, which however left it trading not far from last Friday's closing levels amid a mixed global risk mood. The data flow has been mixed as well, a plunge in retail sales from February poured some cold water on the Aussie recovery story after some very strong employment figures that were released earlier in the week. Arguably jobs data are more relevant to the Reserve Bank of Australia and considering that employment is back to pre-pandemic levels, the risk of the RBA feeling the pressure to tweak their lower for longer stance is not negligible really. It is still highly likely that the RBA will stick to its very dovish tone for as long as possible, considering how the bond market weakness remains a central concern for global central banks. Indeed the big spillover of US yields into the Aussie bond market will still limit the ability of the RBA to keep the long-end yields capped, unless they opt for more drastic measures such as extending yield curve control to the 10 year tenner. In a yield curve control perspective on the 3 year tenner it will be worth keeping an eye on the November 2024 auction this week to gauge any significant shift towards more hawkish views by the market. Otherwise the Aussie calendar is pretty empty this week and the Aussie will remain solely driven by global risk factors. From a technical perspective as the Aussie holds on to support at the 77 level look for a move to test resistance up to the 79 area. A loss of the support at 77 would open a pretty quick retest of the 76 level and if we don't find buyers there then we can look for a test down to the 74 however like I say as we hold the 77 literally look for a move to test resistance at the 79 level and that concludes the weekly market outlook for a week commencing the 22nd of March. As always join me on Thursday for my live trade and market analysis session and I wish you all a good week. Thanks very much.