BoE makes no recommendation on Brexit

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Image via Bank of England / Flickr

Today’s Economic events

  • Japan GDP annualized Q4 -1.10% vs. -1.50%; q/q -0.30% vs. -0.40%
  • Japan current account 520.8bn vs. 715.5bn
  • Japan q/q nominal GDP -0.20% vs. -0.30%
  • Australia NAB business confidence 3 vs. 2 previously
  • China Exports y/y -25.40% vs. -14.50%; imports y/y -13.8% vs. -12.0%
  • China trade balance (USD) 32.59bn vs. 51.0bn
  • Switzerland unemployment rate 3.70% vs. 3.80%
  • Germany industrial production m/m 3.30% vs. 0.50%; y/y 2.20% vs. -1.60%
  • BoE Gov. Carney testifies on Brexit
  • Eurozone GDP q/q 0.30% vs. 0.30%; y/y 1.60% vs. 1.50%
  • Canada housing starts 212.6k vs. 181.5k
  • Canada building permits m/m -9.80% vs. -0.80%

Japan’s final revision to the fourth quarter GDP saw a modestly improved print with the economy contracting 0.30% less than the 0.40% expected contraction. On an annualized basis, Japan’s GDP declined -1.10% against estimates of -1.50%. The Yen continued to trade stronger despite giving up its gains in late trading session yesterday. USDJPY remains muted with prices continuing to trade gradually lower as the Greenback fell in the opening hours today. USDJPY is currently down 0.38% for the day, trading at 113.

China’s export and import data released today showed strong declines on both fronts. Exports fell -25.40% while imports fell -13.80% on a year over year basis. The weak data saw the Aussie and the Kiwi coming under pressure. AUDUSD slipped to session lows at 0.7415 but managed to recover. The Aussie is however down 0.14% for the day at the time of writing. The NZDUSD gave back the late gains from yesterday as prices continued to decline steadily. The Kiwi is down 0.55% trading at $0.676 at the time of writing.

Coming out neutral, Carney said that the Bank of England makes no recommendation on Britain’s membership in the EU and noted that the BoE had tools to remit whatever the outcome of the referendum.

In the UK, the Bank of England was in focus as Governor Carney testified to the Treasury Select committee on the issue of Brexit. Coming out neutral, Carney said that the Bank of England makes no recommendation on Britain’s membership in the EU and noted that the BoE had tools to remit whatever the outcome of the referendum. The views signal the BoE’s neutral stance where Carney on February 23rd inflation report hearings said that the Central Bank would treat the Brexit referendum just as it would on any political events. The British Pound did not react much to the TSC hearings although GBPUSD was trading weaker during the day. GBPUSD is down 0.49% at the time of writing as the Cable remained flat below $1.4268.

EURUSD was mostly muted for the day, as the single currency is up 0.05% with prices trading in a tight range. Eurozone GDP data released today showed the fourth quarter GDP expanding at a pace of 0.30% in the fourth quarter of 2015 with an annualized GDP growth rate of 1.60%, above the estimated 1.50%.

The NY trading session opened with Canadian data. Housing starts posted strong gains for the month of February, rising 212.6k, above the forecasted 181.5k. However, building permits fell -9.80%, more than the expected -0.80% decline. USDCAD is up 0.27% on the data following a decline to the session lows at 1.331.

The commodity markets are broadly stronger today. Gold prices are up 0.39% after a brief rally to $1275 following the previous day’s declines to $1260. Gold is currently trading at $1272 an ounce. WTI Crude Oil futures are up 5.33% for the day, as prices continued to move higher, currently trading at $38 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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