AUD Rises on RBA Hike Expectations
AUD
The Aussie Dollar rebounds to open in the green against the majors this morning, due to markets increased bets on an imminent RBA interest rate increase and positive economic data from China yesterday. Asian equites ended mixed yesterday, the Hang Seng at +1.5%, Shenzhen +0.05% and the Nikkei -0.1%. Locally the ASX 200 closed lower -0.4% as materials and technology sectors led losses at -2.2% and -1.5% respectively. Later this afternoon at 2:30PM the RBA will meet to make their Cash Rate decision which is currently at a 67.5% chance to hike, and would bring the Official Cash Rate to 4.10% if they make a decision to hike. Over to Asia, yesterday saw a flurry of economic data releases out of China with Jan-Feb Industrial Output rising 6.3% y/y (Est. +5.3%) and Jan-Feb Retail Sales printing at 2.8% y/y (Est. +2.5%). The February Surveyed Jobless Rate came in at 5.3% (Est. +5.1%). No major data out for the Aussie until Thursday with Unemployment Rate and Employment Change data set for release.
USD
AUDUSD opens up at 0.7068 this morning off the back of the prospect of tightening monetary policy locally and the US calling on NATO allies to assist in efforts to reopen the Strait of Hormuz. A favourable session for risk assets overnight as hopes increased that oil tankers would soon be safely navigating the Strait of Hormuz again. On Wall St. the Nasdaq was trading +1.2%, the S&P 500 +1.0%, and the Dow Jones +0.9 % entering the final hour of trade. U.S.10-year yields fell 5bps to 4.22%, while Brent Crude was hovering around $100 a barrel. Yesterday, the US Empire State Manufacturing Index showed a rare retraction at -0.2, down from +7.1 and below expectations of 3.9. Earlier this morning President Trump held a press conference at the White House and noted that the U.S. Federal Reserve should hold a "special meeting" to cut interest rates "right now", even though the US Fed is already set to meet this Thursday to decide on interest rates and are largely expected to hold.
EUR
AUDEUR comes in this morning up at 0.6142 due to the Australian Dollar receiving a boost pre RBA meeting and Europe's energy vulnerability causing pressure on the Euro. Looking to equities, the DAX and CAC closed in the green at +0.5% and +0.3% respectively. A quiet day on the calendar for the Euro, with nothing of note until tomorrow evening with Final Core CPI y/y set to release (Est. 2.4%).
GBP
AUDGBP opens up at 0.5309 this morning, trading in a range of 0.5293/16 overnight. The FTSE closed in the green at +0.6. A quiet day for the UK on the economic calendar, with nothing of note until Thursday with Claimant Count Change, Average Earnings Index 3m/y, Unemployment Rate and the BoE Official Bank Rate decision. Despite weak economic growth, the BoE is expected to hold interest rates steady or consider tightening due to renewed inflationary pressures from rising energy prices this Thursday.
NZD
AUDNZD opens slightly down this morning at 1.2070 this morning while still maintaining the 13 year highs gained from the start of the year. Earlier this morning the FPI m/m (Food Price Index) came in at -0.1, down from a 2.5% increase last February.