Global Markets:

  • Asian stock markets: Nikkei up 0.15 %, Shanghai Composite down 0.15 %, ASX unchanged, Hang Seng gained 0.10 %
  • Commodities: Gold at $1296, Silver at $19.44, Crude Oil at $92.85
  • Rates: US 10 year yield stands at 2.40

News & Data:

  • Japan Adjusted Merchandise Trade Balance -964B, Expected: -761.3B, Previous: -1080.8B
  • Japan Merchandise Trade Balance Total -964B, Expected: -714B, Previous: -823.2B
  • Australia Westpac Leading Index -0.1 %, Previous: 0.1 %
  • RBA Governor Stevens says value in maintaining stability in rates
  • Stevens says mindful of allowing time for stimulus to work
  • Stevens says most leading labour market indicators seem to have improved a little this year
  • Stevens says growth to be a little bit below trend in near term
  • Stevens says fall off in mining investment will probably accelerate in coming year
  • Stevens says $A not doing as much as it might to help economy
  • Stevens says growth in non-mining activity increasing
  • Stevens says inflation to be consistent with target
  • Stevens says will be a while before we see a fall in unemployment

FX Update:

  • AUD – Aussie didn’t move much during the speech by RBA Governor Stevens. The comments about possible intervention in the currency market were ignored, as the market sees the RBA not that much concerned about the $A strength to actually take these steps. AUD/USD opened in the Asian session around 0.9296, rallied then to 0.9316 driven by supportive cross flows, but failed to sustain momentum amid broad USD strength. It eventually hit a fresh session low of 0.9284 amid steady supply from leveraged names. Corporate demand around 0.9280 is providing some support for now. Stops sub-0.9270 and next technical support lies at 0.9240.
  • CAD – USD/CAD hit 1.0950 earlier and remains well-bid. Good supply ahead of the 1.10 level, while bids are resting at 1.0920 and towards the big figure.
  • EUR – EUR/USD tumbled yesterday, taking out the barrier options 1.3320-30 and many stops inbetween. The barrier at 1.33 is holding so far, but a breakout looks imminent. Offers building at 1.3340-45.
  • JPY – Strong USD/JPY flows noted overnight with leveraged names again rushing into the long trade. Supply from exporters at 103.20 capped the topside so far, but little resistance until 103.75 after the pair has taken out 103.15 resistance. Bids building at 102.80.
  • NZD – NZD/USD continues to post fresh lows after a series of bad news/data and amid overall market sentiment. The pair broke sub-0.84 and seems to be heading for a test of 0.8340/45 support.

Upcoming Events:

  • 06:00 GMT – German PPI (0.1 % MoM, -0.7 % YoY)
  • 08:30 GMT – Bank of England Meeting Minutes
  • 12:30 GMT – Canada Wholesales Sales (1.3 % MoM)
  • 18:00 GMT – FOMC Meeting Minutes