Global Markets:
- Asian stock markets: Nikkei up 0.55 %, Shanghai Composite gained 0.20 %, Hang Seng rose 0.30 %, ASX 200 rallied 0.65 %
- Commodities: Gold at $1237 (-0.35 %), Silver at $16.20 (-0.50 %), WTI Oil at $47.25 (-0.10 %), Brent Oil at $49.65 (-0.10 %)
- Rates: US 10-year yield at 2.27, UK 10-year yield at 1.19, German 10-year yield at 0.55
News & Data:
- Bank of Japan Interest Rate -0.10 % vs -0.10 % expected
- Australia Employment Change 14k vs 15k expected
- Australia Unemployment Rate 5.6 % vs 5.6 % expected
- Australia Participation Rate 65.0 % vs 64.9 % expected
- Australia NAB Business Confidence 7.0 vs 7.0 previous
- Japan Trade Balance JPY440bln vs JPY485bln expected
- Japan Exports 9.7 % vs 9.5 % expected
- Japan Imports 15.5 % vs 14.6 % expected
- BOJ keeps policy steady, pushes back timing to hit price target – RTRS
- BOJ to cut inflation forecasts but stand pat on policy as economy picks up – RTRS
Markets Update:
The Australian Dollar almost reached 0.80 overnight, but fell back to 0.7930 following mixed employment data. The employment change arrived slightly below expectations. However, the outlook for AUD/USD remains positive and it is likely to test 0.80 soon.
The Bank of Japan left interest rates unchanged, as expected. Further, the central bank cut its inflation forecasts, which suggests that the QE programme will continue for a while. USD/JPY rallied from 111.80 to 112.20 post-BoJ, and the Yen is likely to remain under pressure in the near-term.
The Euro is slightly weaker ahead of the ECB meeting today. The central bank will keep rates unchanged, but the focus will be on the press conference 45 minutes later. The market is expecting that the ECB will signal a shift in monetary policy soon, but Draghi might disappoint EUR longs. Should the ECB lean more towards the dovish side, EUR/USD will come under pressure and likely test 1.14.
Upcoming Events:
- 07:00 BST – German PPI
- 07:00 BST – Swiss Trade Balance
- 07:30 BST – BoJ Press Conference
- 09:30 BST – UK Retail Sales
- 12:45 BST – ECB Rate Decision
- 13:30 BST – ECB Press Conference
- 13:30 BST – US Philadelphia Fed Manufacturing Index
- 13:30 BST – US Initial Jobless Claims
