BoC and RBNZ interest rate decision looms

Mar 09, 1:33 pm
BoC

Image via Bank of Canada / Flickr. Governor Poloz and SDG Wilkins participate in the MPR press conference

Today’s Economic events

  • Australia Westpac Consumer sentiment -2.20% vs. 4.20% previously
  • Japan M2 Money stock y/y 3.10% vs. 3.20%
  • Australia home loans m/m -3.90% vs. -2.70%
  • Japan prelim machine tool orders y/y -22.60% vs. -17.20%
  • UK manufacturing production m/m 0.70% vs. 0.20%
  • UK industrial production m/m 0.30% vs. 0.60%

Coming up

  • BoC Rate decision
  • The US wholesale inventories

The Asian markets closed in the red today with the Nikkei225 losing -0.84% while the Shanghai composite was down -1.35%. The Yen continued to strengthen in early Asian trading. USDJPY fell to session lows below 112.35 before recovering with gains of 0.06% at the time of writing. The Australian dollar is trading near a new session today, trading near $0.749 as the AUDUSD managed to recover the losses from yesterday. The currency is up 0.50% at the time of writing. Economic data from Australia included the Westpac consumer sentiment which fell less than expected at -2.20%. Home loans data also declined -3.90% more than the forecasted -2.70%.

The Kiwi erased all the losses from yesterday as NZDUSD initially fell to session lows of $0.672 before posting a strong recovery to gain 0.30% at the time of writing. Prices are hovering near the $0.68 handle ahead of the RBNZ’s interest rate decision this evening.

In Europe, the equity markets were showing signs of recovery following two days of declines. The German DAX is up 1.27% while the London FTSE100 gained 0.68% for the day. Economic data from Europe was limited to the UK’s manufacturing and industrial production numbers which were mixed. While manufacturing increased 0.70% in February, industrial production grew at a slower pace of 0.30% below forecasts of 0.60%. GBPUSD, which turned weaker yesterday was down -0.02% at the time of writing with price action staying flat for the most part, currently trading at $1.421.

EURUSD is down -0.41% for the day as the single currency turned weaker since the start after prices rallied to session highs of $1.104 in yesterday’s session. Ahead of the ECB’s big meeting tomorrow, EURUSD is likely to remain range bound. At the time of writing, the Euro is trading at $1.096.

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The NY trading session is packed with the Bank of Canada interest rate decision. Expectations from economists are for the BoC to put the policy on hold as economic signals from the Canadian economy remain mixed. Higher Oil price in recent weeks has kept the Canadian dollar stronger to the Greenback. USDCAD has steadily declined for 7 weeks in a row but today’s BoC decision would be a big fundamental risk for the Loonie. Followed up later will be the RBNZ’s interest rate decision with expectations that the RBNZ will hold rate cuts at the moment, but could talk down the Kiwi’s exchange rate which has strengthened significantly over the past few months.

The commodity markets are looking mixed today with Gold prices falling steadily throughout the day after prices touched a high at 1275 yesterday. Gold is currently down -0.67% for the day, trading at $1253 an ounce, just below the key 1250 handle. WTI Crude Oil prices are up 2.57% after yesterday’s decline to $36.20. Oil prices are currently trading at $37 a barrel.

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John has over 8 years of experience specializing in the currency markets, tracking the macroeconomic and geopolitical developments shaping the financial markets. John applies a mix of fundamental and technical analysis and has a special interest in inter-market analysis and global politics.

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