Markets Muted Ahead of RBA Minutes Meeting
AUD
The Aussie Dollar opens in the green across the board, as it rebounds from a slight slump yesterday ahead of todays RBA Monetary Policy Meeting Minutes. Asian equities started the week mixed, the Hang Seng +0.5%, while the Shenzhen fell -1.3% and Nikkei -0.2%. Locally the ASX 200 closed +0.2% as the technology sector led the pack at +5.6%. Trading conditions have been thin to start the week, With US markets closed for Presidents’ Day and several Asian markets observing the Lunar New Year holiday. No Aussie data out yesterday, as all eyes turn to the RBA minutes late this morning, which is expected to provide deeper insight into the rationale behind the recent 25 bps rate hike.
USD
AUDUSD opened slightly up at 0.7073, trading in a range of 0.7066/96 overnight as markets were largely quiet following Presidents' Day in the US. A muted session overnight for equities in the US. Equity and Bond markets were closed, and equity futures were unchanged in their shortened session. Gold and silver were steady while Brent Crude rose 1.3% to $68.70 a barrel. Attention now shifts to a heavy slate of US economic data due later this week. On Wednesday, investors will scrutinise the Fed’s latest Meeting Minutes for fresh clues on the monetary policy outlook. On Friday we will see Unemployment Claims released to see if the trend of climbing unemployment claims continues. On Saturday, markets will assess the core Personal Consumption Expenditures (PCE) inflation report and the advance reading of fourth-quarter Gross Domestic Product (GDP).
EUR
AUDEUR opens up this morning at 0.5968, creeping closer to the 0.6 psychological barrier reached late last week. European equities closed mixed overnight with the DAX and CAC coming in at -0.5% and +0.1% respectively. Yesterday, Industrial Production m/m came in at -1.4% (forecasted at -1.5%). The month-on-month decline was largely expected following weak German and French figures for December. Later today we have German Final CPI m/m and Italian Trade Balance which will do little to move the needle currency wise.
GBP
AUDGBP ticks slightly up at 0.5190 overnight as economists now expect the Bank of England to trim rates in March. The FTSE also closed in the green at +0.3%. A big day for the Sterling ahead with some key economic data set to release today, with UK Claimant Count Change, Unemployment Rate and Average Earnings Index 3m/y.
NZD
AUDNZD remains strong, opening slightly up at 1.1722. Early this morning we had FPI m/m (which measures price of food and food services purchased by households) release at +2.5% after four months of retraction. Tomorrow the RBNZ will meet to decide their Official Cash Rate and are largely expected to hold.