Global Markets:
- Asian stock markets: Nikkei down 0.90 %, Shanghai Composite fell 0.40 %, Hang Seng and ASX both declined 1.15 %
- Commodities: Gold at $1092 (-1.00 %), Silver at $14.70 (-0.50 %), WTI Oil at $50.16 (-1.40 %), Brent Oil at $56.56 (-0.70 %)
- Rates: US 10 year yield at 2.33, UK 10 year yield at 2.08, German 10 year yield at 0.78
News & Data:
- Australian CPI 0.7 % q/q, Expected: 0.8 %, Previous: 0.2 %
- Australian CPI 1.5 % y/y, Expected: 1.7 %, Previous: 1.3 %
- Australian Trimmed Mean CPI 0.6 %, Expected: 0.6 %, Previous: 0.7 %
- Australia MI Leading Index 0.0 %, Previous: -0.1 %
- Japan Industry Activity Index -0.5 %. Expected: -0.5 %, Previous: 0.1 %
- RBA’s Stevens: RBA Has Monetary Policy Balance About Right Currently
- RBA Stevens: Question Of Further Rate Cuts On The Table
- BoJ's Gov Kuroda: Japan's Inflation To Accelerate Considerably, Sees No Need For More QE At Present — RTRS
- Goldman Sachs Head of Commodities Currie: Risks clearly skewed to downside for Gold, a probability that it trades below $1000 this year
- S&P sees chances of Grexit at under 50%
- S&P upgrades Greece sovereign ratings to CCC+ from CCC-; outlook stable
Markets Update:
The Australian Dollar declined overnight, following a lower than expected CPI print. RBA Governor Stevens spoke as well, but there were no surprises from him. He stated that the current policy remains appropriate and that further rate cuts are still on the table. AUD/USD fell to a low of 0.7372, but recovered from there and is trading in the low 0.74s as we are heading into the London open.
NZD/USD had a decent rally yesterday, but momentum failed to sustain above 0.6650. A less dovish RBNZ could spark a short squeeze in the pair, but given the negative NZ economic outlook and the recent, sharp decline in commodity prices, it seems rather unlikely. Key resistance at 0.6662 and then 0.6740, while support is seen at 0.6550 and then 0.65.
The other major currencies traded in a tight range overnight. EUR/USD 1.0923-60, GBP/USD 1.5546-78, USD/JPY 123.60-88. Looking ahead, the key events of the day will be the BoE Minutes and the RBNZ rate decision in the late evening.
Upcoming Events:
- 09:00 BST – Italian Industrial Orders
- 09:30 BST – Bank of England Meeting Minutes
- 10:00 BST – Italian Retail Sales
- 14:00 BST – US House Price Index
- 15:00 BST – US Existing Home Sales
- 15:30 BST – US Crude Oil Inventories
- 22:00 BST – RBNZ Interest Rate Decision
- 22:00 BST – RBNZ Statement
