Tomorrow: RBA Minutes & China's Loan Prime Rates
AUD
The Aussie Dollar kicks off the week higher against most major currencies with commodities performing largely well in Friday’s session, excluding SGX Iron Ore which gave up -0.5%. Asian equities were stronger to end the week as the Hang Seng gained +2.6%, Nikkei +0.9% and the Shenzhen +0.6%. The ASX closed +0.7% led by Material’s and Energy’s respective +1.5% and +1.0% gains. China has re-opened after a week-long celebration of their Spring Festival, kicking off tomorrow with their 1-y and 5-y Loan Prime Rate decisions. Notably, the 5-y rate is expected to be lowered to 4.1% (currently 4.2%) as Beijing continues to implement measures in an attempt to stir up economic activity. The 1-y figure is expected to be held at 3.45%. Tomorrow, we’ll also see the RBA’s Monetary Policy Meeting Minutes which will provide insight into our central bank’s most recent decision to hold the Cash Rate at 4.35%.
USD
A strong US PPI print saw AUDUSD stoop to 0.6496 lows in Saturday’s early hours before rallying to 0.6545 highs, then falling off to this morning’s 0.6530 open. A soft night on Wall St. saw the Dow close -0.8%, S&P 500 -0.5% and Nasdaq -0.4%. US PPI for January printed at 0.3% m/m and 0.9% y/y, beating expectations of 0.1% and 0.6% respectively, with the Core measures also coming in hot. The report comes just days after the CPI showed inflation holding stubbornly higher (0.4% y/y), further complicating the inflation picture despite Fed expectations for moderation throughout the year. Looking forward, US banks are currently closed in observance of Presidents’ Day, with a quiet front-half of the week set to be followed by the FOMC Meeting Minutes on Thursday morning. We’ll also see Unemployment Claims and Flash Manufacturing & Services PMIs in Friday’s early hours.
EUR
AUDEUR pushed forward throughout Friday’s session, retesting the 0.6070 resistance level before opening this morning relatively flat at 0.6061. Equities performed well with the DAX +0.4% and CAC +0.3%. After a couple of low-impact weeks in terms of Eurozone data, markets will be looking forward to Thursday evening’s Flash Manufacturing & Services PMIs from France, Germany and the Eurozone as a whole. Leading up to that, we’ll see the Eurozone Current Account tomorrow evening.
GBP
AUDGBP opens at 0.5178 despite UK Retail Sales climbing higher in January to beat expectations on all fronts. The headline figure (including auto fuel) rose +3.4% m/m against expectations of a +1.5% reading. The FTSE had a strong day, climbing +1.5%. On Wednesday, we’ll see the Bank of England’s Monetary Policy Report Hearings (where Governor Bailey and other Members testify on inflation and the economic outlook), while the main UK event for the week will be their Flash Manufacturing & Services PMIs on Thursday evening.
NZD
AUDNZD reached 1.0703 highs on Friday evening before falling back to 1.0657 this morning. Today's BusinessNZ Services Index printed at a strong 52.1. Some low-tier data scattered throughout the week, while the main event will be their Retail Sales q/q on Friday morning. Markets are currently expecting a -0.2% fall after the previous flat reading.