Global Markets:

  • Asian stock markets: Nikkei up 1.40 %, Shanghai Composite gained 0.30 %, Hang Seng declined 0.50 %, ASX rose 0.30 %
  • Commodities: Gold at $1282 (-0.40 %), Silver at $19.48 (-0.05 %), Crude Oil at $95.75 (-0.20 %)
  • Rates: US 10 year yield stands at 2.37

News & Data:

  • RBA leaves rates unchanged at 2.50 %
  • Australia Building Approvals 2.5 %, Expected: 1.5 %, Previous: -3.8 %
  • Australia Current Account -13.7B, Expected: -14.0B, Previous: -7.8B
  • RBA: Most prudent course is likely to be period of stability for rates
  • RBA: Weakening China property markets a challenge in near term
  • RBA: Australian Dollar remains above estimates of its fundamental value
  • RBA: Recent data suggests moderate growth occuring
  • RBA: Inflation expected to be consistent with target over next 2 years
  • RBA: Labour market has degree of spare capacity, will be some time before jobless rate declines

FX Overview:

  • AUD – No surprises from the Reserve Bank of Australia. The bank kept rates unchanged at 2.50 %, as expected, and the statement wasn’t really different from the last one. The RBA said that the recent data suggests the economy is growing moderately, but sees the weakening Chinese property market as a worry in the short-term. They also included their standard phrase about the Australian Dollar being overvalued, but the market, as usual, didn’t care. RBA Governor Stevens will speak tomorrow and perhaps try to talk down the AUD in a more aggressive way. AUD/USD started the day at 0.9330 and was consolidating in a 10 pips range until the Tokyo open. Shortly after Tokyo got started, USD buying across the board occured and Aussie got pushed down as well. The pair hit a low of 0.9282 just ahead of the RBA decision. AUD/USD moved back above 0.93 after the event and has settled there for now.
  • CAD – USD/CAD broke above the 100 DMA at 1.0862 and then through the 200 DMA at 1.0892, hitting 1.09 just earlier. Dealers report though that flows were rather light, it seems that a combination of tight trailing stops on the way to 1.09 & weaker selling interest were the main factors. Offers reported towards 1.0920. Key intraday support now at 1.0850.
  • CHF – Comments from SNB’s Jordan over the weekend might have had a bit of impact on the Swiss Franc. EUR/CHF has been slowly rising over the past three sessions, reaching a high of 1.2076 earlier.
  • EUR – There is a option barrier at 1.31 in EUR/USD and Asia thinks that it will take more to take it out. Large bids reported to be resting from 1.3110 down to the big figure. To the topside, offers from leveraged names at 1.3150 and from Asian sovereign names towards 1.3170. Intraday stops through 1.3140 and 1.3160.
  • JPY – Dealers report that Japanese banks were the one who started the USD/JPY buying and leveraged names were happy to join them and push the pair through the 104.50 barrier. It reached 104.86 eventually, but profit-taking from various names has slowed down momentum ahead of the 105.00 barrier. That one is said to be large and we can expect better supply ahead of the big figure.
  • NZD – NZD/USD fell from 0.8390 to 0.8340. Key support now at 0.8308, break below would suggest move to Feb 20 low at 0.8240.

Upcoming Events:

  • 05:45 GMT – Swiss GDP (0.5 % QoQ, 1.7 % YoY)
  • 07:00 GMT – Spanish Unemployment Change (26.0k)
  • 08:30 GMT – UK Construction PMI (61.4)
  • 09:00 GMT – Euro Zone PPI (-0.1 % MoM, -1.1 % YoY)
  • 14:00 GMT – US ISM Manufacturing PMI (56.8)