Global Markets:
- Asian stock markets: Nikkei down 0.45 %, Shanghai Composite gained 0.15 %, Hang Seng declined 0.60 %, ASX 200 lost 1.35 %
- Commodities: Gold at $1248 (+0.35 %), Silver at $16.50 (+0.50 %), WTI Oil at $43.45 (-0.15 %), Brent Oil at $45.90 (-0.25 %)
- Rates: US 10-year yield at 2.16, UK 10-year yield at 1.00, German 10-year yield at 0.26
News & Data
- Australia MI Leading Index 0.0 % vs -0.1 % previous
- PBoC Fixes USDCNY Reference Rate At 6.8193 (prev fix 6.8096 prev close 6.8295)
- Oil slump spooks investors; China stocks underwhelmed by MSCI – RTRS
- Oil holds near multi-month lows as glut fears persist – RTRS
Markets Update:
The US Dollar extended gains overnight. The decline in stock markets and oil prices triggered a risk-off sentiment in markets, which provided additional support for the USD. Risk currencies such as the Australian and New Zealand came under pressure overnight. AUD/USD fell from 0.7590 to 0.7560. Key support is seen at 0.7520. Should the pair break below it, a correction towards 0.74 seems likely.
The focus today will be on the RBNZ rate decision. No changes are expected, but traders are looking forward to the central bank’s statement and whether it will maintain its slightly hawkish tone. The strong NZD could be a concern for the RBNZ though. NZD/USD rallied from 0.6820 to 0.73 in the past two months. Meanwhile, AUD/NZD fell from 1.09 to 1.04. This puts New Zealand’s export industry under pressure.
The Pound fell sharply after dovish comments from Bank of England Governor Carney. He said that “now is not the right time” for a rate hike. GBP suffers now from lower rate expectations, as well as the political uncertainty in the UK. The short-term outlook remains negative and move towards 1.25 likely.
Upcoming Events:
- 15:00 BST – US Existing Home Sales
- 15:30 BST – US Crude Oil Inventories
- 22:00 BST – RBNZ Rate Decision
