Today’s Economic events
- RBA releases monetary policy meeting minutes
- Australia new motor vehicle sales -0.10% vs. 0.40% previously
- BoJ leaves policy unchanged
- Japan revised industrial production m/m3.70% vs. 3.70%
- Japan tertiary industry activity m/m 1.50% vs. 0.40%
- France final CPI m/m 0.30% vs. 0.20%
- Eurozone employment change q/q 0.30% vs. 0.20%
- US Core retail sales m/m -0.10% vs. -0.20%; retail sales m/m -0.10% vs. -0.10%
- US PPI m/m -0.20% vs. -0.20%; Core PPI m/m 0.00% vs. 0.10%
- US Empire state manufacturing index 0.6 vs. -10.3
- New Zealand GDT price index
- US TIC long term purchases
- New Zealand current account
The Asian markets got off to a busy start with the RBA’s monetary policy meeting minutes being released. The Australian dollar fell on the release of the statement which reinforced the Bank’s easing bias but did not add much to the minutes. The RBA said that it was too early to tell if the market volatility in January would filter through to slow domestic growth. The recent appreciation of the Australian dollar is increasing speculation that the RBA could come out and cut rates in April or May meeting to stem the exchange rate appreciation. AUDUSD is down -0.56% for the day and is into the second day of declines following a brief rally to 0.7594 last Friday. The NZDUSD was also trading weaker today, down -0.36% after prices attempted to recover the RBNZ induced losses. New Zealand global dairy trade index data is expected to be released later this evening.
The Bank of Japan left interest rates and monetary base unchanged at today’s meeting but speculation mounts that the BoJ could act as soon as April. The BoJ lowered its inflation expectations and opted to wait and assess the impact of negative interest rates before taking further policy action. USDJPY fell on the news and is currently down -0.88% for the day as the Yen strengthened across the board.
The Asian markets were mixed with the Nikkei225 closing with -0.68% losses while the Shanghai Composite gained 0.17%.
In Europe, the quarterly employment change from Eurozone showed a modest increase of 0.30%, while French final inflation figures showed an increase of 0.30% above forecasts of 0.20%. The Euro was looking to regain the lost ground but the EURUSD is currently flat with 0.06% gains at the time of writing. The currency remains flat stuck below 1.1135 resistance and 1.1045 support.
The British Pound saw a new bout of selling today as GBPUSD is down -0.85% for the day, with the British Pound trading at $1.4178. The declines come after prices posted a steady recovery last week which saw GBPUSD erase the previous losses.
European equity markets are weaker with the German DAX down -0.68% and the London FTSE100 down -0.59% at the time of writing.
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In the US, producer prices index saw another weak print. Headline wholesale inflation fell -0.20% as expected while core wholesale inflation remained flat at 0.00% on declining energy and food prices. Retail sales numbers were also weaker with the core retail sales falling -0.10% and the headline retail sales down -0.10% as expected with downward revisions to previous month’s data. The US Dollar was mixed on the news.
On the commodity front, Oil prices continued to decline following the previous rally towards the $38.75 handle. At the time of writing, WTI Crude oil futures for April delivery was down -4.75% trading at $36.70 a barrel. Gold was also weaker ahead of the Fed’s meeting tomorrow, trading at $1232 an ounce or down by -0.26% for the day.