Important events today:

09:00 UTC – EU: composite PMI.

09:30 UTC – GB: composite PMI.

13:45 UTC – US: composite PMI.

Japan presented fresh inflation statistics for February. The overall figure was down 1 p.p. to 3.3%, but the central bank is watching for core inflation, which rose 0.3 p.p. to 3.5%. Usually core inflation is always lower than overall inflation, but in the Land of the Rising Sun it is the other way around.

This is a negative signal for the Central Bank of Japan, as the regulator is still holding the rate in negative territory and the macroeconomics are giving clear signals that it is time to tighten monetary policy. The Japanese central bank is caught in a trap. On the one hand, we need to raise the rate to combat high inflation, as the core rate is almost twice the target. On the other hand, the rate increase will lead to losses of banks and pension funds, which will have a negative revaluation of their bond portfolios and a banking crisis will start in Japan following the USA example.

Recommendations: flat 130.00 – 131.00.