Japan’s Q4 GDP (Gross Domestic Product) figures came out 0.4% lower on a quarterly basis versus an expected decay of only 0.2% while the annualized GDP went down -1.4% on a yearly basis with an expected -0.8% and a previous 1.0% advance. Previous to the release, ING’s economist James Smith declared that the figures will most certainly be affected by the weather-induced shortening in consumption.
The EUR/USD major went slightly up on Monday for a short period of time but resumed quickly to post fresh daily lows in the aftermath of Draghi’s comments. The ECB (European Central Bank) President said that the institution is ready to take a stand, in case key indicators are falling out of the plan, and revise the monetary policy rates in March’s meeting. At the beginning of the day, the pair was looking forward to breaking the 1.1200 resistance line, but the trend was pushed back by Draghi’s comments. The spot fell to until 1.1169, down roughly 0.65% for the day.
The second day of the week finds the AUD/USD trying to comeback from below 0.6990 levels, more specifically from the 0.6983 hit in the recent sell-off. The trend fell from 0.7115 due to the dollar’s strong comeback.
The key components of the sentiment driving the comeback lay in the RBA’s (Reserve Bank of Australia) “optimistic” approach to the global economic turmoil. In the latest press release, Stevens declared that he remains positive in what regards the outlook, although he is aware of some risks from outside country boundaries. So, although investors expected a bearish approach to the situation, things got better for the AUD as it was stated that the decreased inflation will come at hand in the possible policy easing. The key piece of information was that the country is relying on the weak Chinese data as an anchor for the trade outlook, meaning the commodity prices.
Crude price went down following the correction of last week’s hike, trading just below the $29.00 handle per barrel, marking a 3-day low. The US benchmark WTI (West Texas Intermediate) posted significant losses after yesterday’s meeting between the oil ministers of Russia, Saudi Arabia, Qatar and Venezuela. The meeting in Doha failed to generate a solution regarding the pressure around the oil price, which can be translated as a potential output reduction. Prices went away from the $31.00/barrel area right after the release, clustering in the $28.80/barrel vicinity where the support line seems to have set.
