Today’s Economic events
- Australia employment change -7.9k vs. 13.0k
- Australia unemployment rate 6.0% vs. 5.80%
- RBA Foreign exchange transactions 728mn vs. 1175mn previously
- China CPI y/y 1.80% vs. 1.90%; PPI y/y -5.30% vs. -5.40%
- Switzerland trade balance 3.51bn vs. 2.67bn
- Switzerland imports m/m 2.50% vs. -8.40% previously; exports y/y -1.10% vs. -1.50%
- France CPI m/m -1.0% vs. -1.0%; CPI y/y 0.20% vs. 0.20%
- Eurozone current account 25.5bn vs. 22.3bn
- ECB releases monetary policy accounts
- US initial jobless claims 262k vs. 275k
- Philly Fed manufacturing -2.80 vs. -2.90
- Canada wholesale trade m/m 2.0% vs. -0.30%
- US Weekly Crude Oil inventories report
- Fed’s Williams speech
The FOMC minutes released yesterday did not surprise the markets much leading to rather muted reaction into the closing session yesterday. The Dollar, however, looked weaker but the declines were subdued. In the Asian trading session today, Australia’s jobs report released surprised with the unemployment rate spiking to 6.0%, following a decline to 5.80% previously. The monthly employment change also showed a decline of -7.9k against estimates of 13.0k. The Australian labor market data was one of the key strong points for the RBA, but with the uncertainty looming, expectations are starting to build for further rate cuts down the line. The Australian dollar fell strongly in the opening session to test intraday lows blow $0.714 before managing to pull back higher. Prices remain range-bound within yesterday’s range as the AUDUSD currently trades at $0.715 down -0.39% for the day.
The NZDUSD was seen trending higher but the gains were quickly erased after an intraday high to $0.66. The Kiwi declined off the session highs to trade at $0.662, down -0.13% lower for the day. The quarterly PPI data released late yesterday showed a decline of -1.20% in PPI input and -0.80% decline on PPI output which is likely to keep inflation flat or muted for the most part.
The Japanese Yen was rather muted. The sentiment was lifted with China’s inflation rising 1.80%. Although it fell short of 1.90% estimates, the uptick in inflation from previous month’s 1.60% was well received. The Yen, however, is trading sideways, with USDJPY currently at 113.8Yen, down -0.22% at the time of writing. Asian equity markets were mixed with the Nikkei 225 closing the day with 2.28% gains, while the Shanghai Composite closed with -0.16% losses for the day.
The European trading session was relatively quiet with the Euro staying flat after failing to capitalize on a weaker Greenback since yesterday’s FOMC minutes. EURUSD is currently trading at $1.108 and is down -0.37% for the day. French inflation data released showed a decline of -1.0% for the month, while the annualized CPI stood at 0.20%.
The British Pound was seen trending higher today with the GBPUSD currently trading at $1.436 after dipping to a session low at $1.4262. EU members are currently discussing the UK reforms package with expectations to reach a deal this week. UK’s Premier, David Cameron has been in negotiations with his EU counterparts in Brussels to renegotiate the terms for the UK to remain in the common block. The European equities were trading mixed in today’s session with the German DAX rising 1.56% while the London FTSE100 is down -0.40%.
The OECD released a report today on global GDP, which was dovish. The Organization for Economic Cooperation and Development expects global GDP to grow 3.0% in 2016, down from the previous estimates of 3.30%. It cut Japan’s 2016 growth to 0.80% from 1.0% while leaving China’s growth forecasts unchanged at 6.50%. Eurozone GDP is expected to grow 1.40%, down from 1.80% initial estimates, while the US GDP growth was revised lower to 1.40% from 1.80%.
The NY trading session opened with the weekly jobless claims falling to 262k, below the estimates of 275k. US Philly fed manufacturing index released simultaneously was at -2.8 against estimates of -2.90.
The US Dollar was however mixed, weaker against the Yen but stronger against the AUD, NZD and the Euro. US equity futures are looking to another day of gains led by the strong rally in Crude Oil yesterday. Ahead of the open, the Dow Jones futures are up 0.33% while the S&P500 is up 0.25%.
On the commodity front, Gold is trading at $1206 an ounce and is down -0.18% for the day. Prices remain below the $1212 resistance level but so far, Gold is trading within yesterday’s range. WTI Crude Oil is in a bullish mode following yesterday’s news that Iran would support the Oil production freeze. WTI Crude Oil is trading at $31.4 a barrel ahead of the weekly inventory report due later in the day. Yesterday, the American Petroleum Institute’s weekly Crude Oil inventory report showed a decline of 3.3 million barrels in the week ending February 12th against estimates of a build up to 3.9 million barrels.