European Open Briefing

Global Markets:

  • Asian stock markets: Nikkei down 0.35 %, Shanghai Composite gained 0.20 %, Hang Seng rose 0.40 %, ASX 200 lost 0.10 %
  • Commodities: Gold at $1228 (-0.45 %), Silver at $17.36 (-0.45 %), WTI Oil at $49.10 (+0.40 %), Brent Oil at $51.90 (+0.50 %)
  • Rates: US 10-year yield at 2.48, UK 10-year yield at 1.24, German 10-year yield at 0.44

News & Data:

  • Australia ANZ Roy Morgan Weekly Consumer Confidence Index Mar 20: 112.0 (Prior 113.1)
  • Australia House Price Index QoQ Q4: 4.1% (Prior 1.50%)
  • Australia House Price Index YoY Q4:7.7% (Prior 3.50%)
  • PBoC Fixes USDCNY Reference Rate At 6.9071 (Prev 6.8998)

RBA Meeting Minutes:

  • Judged steady policy consistent with growth and inflation targets
  • A rising AUD would complicate economic transition
  • Recent data suggested a ‘build-up of risks’ in the housing market
  • Home prices strong and rising briskly in Sydney and Melbourne
  • Home investment borrowing had picked up, debt rising faster than household incomes
  • Slow growth in incomes could restrain consumption given high debt levels
  • Soft GDP wage measure suggests very little labour cost pressure in economy
  • Wages growth, underlying inflation expected to rise only gradually
  • Still difficult to assess momentum in labour market

Markets Update:

The Australian Dollar declined overnight as the RBA meeting minutes were considered rather dovish. Recent economic data out of Australia was weak too, especially the latest jobs market numbers. AUD/USD fell from 0.7735 to a low of 0.77. The pair found solid support there and bounced back to 0.7710, where it consolidated into the Sydney session close. Key support is now seen at 0.7650/60, while resistance lies at 0.7740, followed by 0.7780.

USD/JPY came under pressure in the early Asian session, falling to 112.25. However, the pair caught a bid later and recovered to 112.80. Resistance is noted at 113.00, and decent selling interest lies around 113.50.

The Pound was sold yesterday, following the news that Brexit will officially start next week. However, that was already expected and the downside momentum quickly waned. GBP/UD consolidated in a 1.2355-80 range in Asia. The focus now lies on the upcoming inflation data, which be released today at 09:30 GMT. The market is expecting an increase in the CPI numbers, from -0.5 % in January to +0.5 % in February.

Upcoming Events:

  • 09:30 GMT – UK CPI
  • 10:00 GMT – BoE Governor Carney speaks
  • 10:00 GMT – FOMC Member Dudley speaks
  • 12:30 GMT – US Current Account
  • 12:30 GMT – Canadian Retail Sales
  • 16:00 GMT – FOMC Member George speaks
  • 22:00 GMT – FOMC Member Mester speaks
  • 23:50 GMT – Japanese Trade Balance
  • 23:50 GMT – BoJ Meeting Minutes
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