Global Markets:

  • RBA Interest Rate Decision: 2.5%, Expected: 2.5%, Previous: 2.5%
  • Australia (AUD) Trade Balance: 0.731B, Expected: 1.200B, Previous: 1.200B
  • As of 04:00 GMT, the Shanghai Composite is up 0.50 % while Australia’s ASX gained 0.30 %
  • Japanese, Korean and Hong Kong markets are closed for a holiday
  • Gold at $1309 (unch), Silver at $19.53 (-0.20 %), Crude Oil at $99.46 (unch)
  • US 10 year yield stands at 2.606

 FX Flows/Orders:

  • The Reserve Bank of Australia (RBA) – left rates unchanged at 2.50 % and kept its neutral bias. The RBA stated that China’s growth appears to have slowed a little in early 2014, but remains generally in line with policymakers’ objectives. The bank sees some improvement in indicators for the labour market, but it will take some more time before unemployment declines consistently. Inflation is consistent with target and if domestic costs remain contained, that should continue to be case over the next one to two years. Monetary policy remains accommodative. The bank considers the decline in the exchange rate as helpful in achieving balanced growth, but less so than previously as the AUD rose over the past few months. The exchange rate remains high by historical standards.
  • AJD/USD – broke above 0.93 shortly after the statement as it was in line with expectations. It is possible some short-term specs expected more aggressive comments on the exchange rate of the Australian Dollar and had to cover since the bank only repeated last months statement. The pair ran into decent selling interest from various names, including macro funds, above the 0.93 level and is now back at 0.9280.
  • USD/CAD – declining again after the large option expiries at 1.10 yesterday. Good bids seen around the 1.0920 level, stops below. An US bank put out a report on FX positioning yesterday, mentioning that active currency managers have covered plenty of their CAD short exposure, but the trade remains fairly crowded.

 Upcoming Events:

  • 07:15 GMT – Spanish Services PMI (54.4)
  • 07:45 GMT – Italian Services PMI (50.4)
  • 07:50 GMT – French Services PMI (50.3)
  • 07:55 GMT – German Services PMI (55.0)
  • 08:00 GMT – Euro Zone Services PMI (53.1)
  • 08:30 GMT – UK Services PMI (57.6)
  • 09:00 GMT – Euro Zone Retail Sales (-0.2 % MoM, 1.0 % YoY)
  • 12:30 GMT – Canadian Trade Balance (-40.4B)
  • 14:00 GMT – Canadian Ivey PMI (54.0)
  • 22:45 GMT – New Zealand Employment Change (0.6 % QoQ)
  • 22:45 GMT – New Zealand Unemployment Rate (5.9 %)