Markets Look to ECB Rate Decision Tonight

Please Note:
FX Corp Will Be Closed Tomorrow Due to the Australia Day Public Holiday

AUD

The Aussie Dollar opens a tad lower against most majors this morning after global PMIs landed mixed overnight (manufacturing sectors generally exceeding expectations, services sectors generally underperforming). Asian equities also closed mixed with the ASX up +0.1%, Shanghai Comp up +1.8%, and Nikkei down -0.8%. Commodities followed suit with Crude Oil up +1%, Natural Gas up +6.9%, Gold down -0.4%, Silver down -0.8%, and Iron Ore up +0.6%. A quiet day ahead locally with only the RBA Bulletin being released at 11:30am to provide an analysis of the current and future economic conditions from the bank’s viewpoint. No domestic or Chinese data set to be released for the rest of the week.
 

USD

The AUDUSD had fluctuations of nearly half a cent overnight from US Flash Manufacturing and Services PMI’s both coming through better than expected with Manufacturing at 50.3 (expected at 47.6) and Services at 52.9 (expected at 51.4), however, still managed to open relatively flat at 0.6576. Wall St. rallied with the Nasdaq trading +0.6%, the S&P 500 +0.3%, and the Dow Jones +0.1%. Tonight at 12:30am, we have various data pieces coming out of the US, the main events to look out for are the Advance GDP q/q, which is expected to come in at 2% (previously 4.9%), and Unemployment Claims which is expected to come in at 199K (previously 187K). Tomorrow evening will bring the Core PCE metric (the Fed's preferred measure of inflation).
 

EUR

The AUDEUR opens lower this morning at 0.6042 due to the strengthening of the Euros Flash Manufacturing PMI’s, despite their Flash Services PMI’s coming through weaker than expected, while European equities closed in the green with DAX up +1.6% and CAC up +0.9%. Out of the Eurozone tonight, they have their Main Refinancing Rate and Monetary Policy Statement being released at 12:15am followed by the ECB Press Conference. The European Central Bank is set to hold interest rates at 4.5% after its monetary policy meeting which economists are predicting that “the ECB is unlikely to deliver any policy changes or major policy messages”. Markets are nonetheless pricing in around a 60% probability of the first interest rate cut taking place in April.
 

GBP

The AUDGBP opens slightly lower this morning at 0.5165 off the back of their strong Flash PMIs with their Manufacturing coming through at 47.3 (expected at 46.7) and Services at 53.8 (expected at 53.1). UK equities also closed in the green with the FTSE +0.6%. A quiet night ahead in the UK with only their CBI realized sales being released at 10pm which is expected to come in at -19 from previous month’s -32.
 

NZD

The AUDNZD continues its downward trend from yesterday after quarterly Kiwi CPI landed on-expectations at +0.5%, opening lower this morning at 1.0760. No more Kiwi data set to be released this week, next piece of data set for Monday morning at 8:45am, when they have their Trade Balance.