China inflation stable at 1.5% y/y. RBNZ rate decision in focus
- Australia Westpac Consumer confidence m/m -0.8% vs. 3.9% previously
- Australia Westpac consumer confidence 100.8 vs. 101.7 previously
- Australia home loans m/m -0.5% vs. -1.0%
- China CPI y/y 1.5% vs. 1.4%; PPI y/y -5.9% vs. -6.0%
- ECB’s Lautenschlager speech
- Swiss unemployment rate 3.4% vs. 3.4%
- German current account 23bn vs. 23.7bn; Trade balance 22.5bn vs. 21.7bn
- German exports m/m -1.2% vs. -0.6%; imports m/m -3.4% vs. -1.0%
Later
- US Crude Oil inventories
- RBNZ Monetary policy statement
The equity markets closed weak across the board yesterday on concerns on China’s trade balance data. The risk on sentiment saw the Yen gain ground into this morning’s Chinese inflation numbers. However, data was mostly in the positive, with China’s annualized inflation rising 1.5%, beating estimates of 1.4% growth. The producer price index was, however, unchanged at -5.9%. The data was largely supportive of the Aussie and the Kiwi dollars and managed to stave off a strong bearish response from the equity markets. That said, the Yen still moderately stronger today, especially against the US Dollar and the Kiwi dollar. USDJPY was trading weaker, down -0.41% for the day as the Yen firmed up since the opening session. USDJPY is now down for the second consecutive day, trading at 122.44 at the time of writing.
Data from Australia this morning included the Westpac consumer confidence which fell -0.8% down from 3.9% last month. Home loans fell -0.5%, less than the expected -1.0% decline. The AUDUSD posted a new 6-day low at 0.7182 before recovering off the lows and is down -0.11% at the time of writing. The Kiwi continues to trade weaker ahead of the RBNZ’s interest rate decision due later this evening. NZDUSD is down -0.36% at the time of writing with prices touching down to a 5-day low briefly at 0.6594 before easing back higher. The RBNZ is expected to cut interest rates by 25bps at today’s meeting.
The European session was relatively quiet in comparison. ECB members were on the wires justifying the ECB’s decision last week noting that the markets went into the event with strong expectations. The Euro had rallied over 3.0% on the ECB’s monetary policy last week. Data from European today included German exports which fell -1.20% posting a sharper than expected decline while imports fell -3.40%. The Euro, however, shrugged off the data. EURUSD was up 0.48% for the day, trading near 1.094 but remaining below last Thursday’s high.
GBPUSD was also stronger today up 0.54% as prices reversed strongly since yesterday’s low at 1.49725. The Cable is likely to remain pressured into tomorrow’s Bank of England monetary policy meeting.
The US trading session today is quiet with no major data on the tap. Yesterday, BoC Governor Stephen Poloz, in his speech hinted that the BoC would not hesitate to take interest rates into negative territory if needed. USDCAD closed at highs of 1.3622 yesterday and remains largely flat today, down -0.04% at the time of writing.
The commodity markets are mixed with WTI Crude Oil down -0.24% for the day trading near $37.75 a barrel after prices touched a new 7-year low at $36.63 yesterday. Gold prices are up 0.38% for the day trading at $1079 an ounce.
