European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.20 %, Shanghai Composite lost 0.10 %, Hang Seng and ASX 200 both rose 0.30 %
  • Commodities: Gold at $1226 (+0.05 %), Silver at $17.78 (+0.05 %), WTI Oil at $53.20 (-0.05 %), Brent Oil at $55.95 (-0.10 %)
  • Rates: US 10-year yield at 2.49, UK 10-year yield at 1.22, German 10-year yield at 0.34

News & Data:

  • Australia AIG Construction Index (Feb): 53.1 (prev +0.7 to 47.7)
  • Japan Foreign Reserves (USD) (Feb): 1232.3bn (prev 1231.6bn)
  • UK BRC Retail Sales Monitor like-for-like (YoY) (3m to Feb): -0.40% (est -0.20%, prev -0.60%)
  • PBOC sets USD/CNY mid-point today at 6.8957 (vs. yesterday at 6.8790)
  • RBA Rate Decision:
  • RBA holds Cash Rate at 1.50%, as expected
  • Rising Australian dollar could complicate economic transition
  • Global economic conditions have improved over recent months
  • Unchanged policy consistent with growth, inflation targets
  • Labour indicators have been mixed
  • Higher commodity prices have supported a rise in Australia’s national income
  • Headline inflation expected to pick up over the course of 2017
  • House prices rising briskly in some markets
  • US rates expected to rise further, no longer expectations of further easing in other major economies
  • Australian economy continuing to transition after mining boom

Markets Update:

The main event overnight was the RBA rate decision. The central bank left rates unchanged as expected. In its statement, it acknowledged that global economic conditions have improved. Further, the RBA saw inflation rising during the course of the year, though labour conditions have been mixed.

Overall, it was a neutral statement and signalled that the RBA will remain on hold in the near-term. This was in line with expectations.

The Australian Dollar rose nevertheless, on the fact that there were no dovish comments. AUD/USD rallied from 0.7590 to a high of 0.7630 so far.

Price action in the other major pairs was relatively quiet. NZD/USD followed the AUD higher, rising from 0.6980 to 0.7020. The Euro, Yen and Pound are almost unchanged on the day against the Dollar.

Upcoming Events:

  • 07:00 GMT – German Factory Orders08:30 GMT – UK Halifax House Price Index
  • 10:00 GMT – Euro Zone GDP
  • 13:30 GMT – US Trade Balance
  • 13:30 GMT – Canadian Trade Balance
  • 15:00 GMT – Canadian Ivey PMI
  • 23:50 GMT – Japanese GDP
  • 23:50 GMT – Japanese Current Account
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