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Can the RBA Shoot the Aussie Down?

The Reserve Bank of Australia (RBA) will conclude its March policy meeting at 01:30 GMT Tuesday. The domestic economy is doing well and commodity prices have soared, but the RBA won't be happy about the recent surge in bond yields and the exchange rate. Markets have even started pricing...

Asian Equities Start Week With Gains

Equities race higher on vaccines and stimulus Friday saw another chaotic day on Wall Street, with the Nasdaq finishing higher while the S&P 500 and Dow Jones continued falling. It is all about the J&J vaccine re-energising the global recovery trade today in Asia, though, with regional markets rallying strongly. South...

Vaccine Hopes Steady The Ship

A semblance of business as usual has reappeared this morning after another chaotic session in New York on Friday. US FDA approval of the one-shot Johnson and Johnson Covid-19 vaccine over the weekend has seen the global recovery trade reappear with a vengeance this morning. Equities, energy and commodities...

European Open: Minor Bounce For Indices Ahead Of Key PMI Reports

Sentiment was given a slight boost in Asia today following the weekend's positive news flow. Asian futures: Australia's ASX 200 index rose by 116.3 points (1.74%) to close at 6,789.6 Japan's Nikkei 225 index rose by 597.66 points (2.06%) to close at 29,563.67 Hong Kong's Heng Seng index has risen...

Markets Stabilize in Tight Range, Employment and Prices Data in Focus

Commodity currencies and Sterling recover broadly as sentiments in Asian markets stabilized, after mixed economic data. In particular, Nikkei is trading up over 2% at the time of writing, with help from strong PMI manufacturing. On the other hand, Yen turn softer together with Swiss Franc, Dollar and Euro....

RBA Preview – Assessing Impacts of Rising Yields on Economy after Unexpected Increase in Bond Buying

At tomorrow’s meeting, the RBA should leave all monetary measures unchanged. The cash rate, 3-year yield target and the rate on the TFF program will stay unchanged at 0.1%. The QE program will likely remain intact as the central bank only doubled the size to AU$200B last month. While...

Australia AiG manufacturing rose to 58.8 in Feb, input prices surged

Australia AiG Performance of Manufacturing Index rose to 58.8 in February, up from 55.3, hitting the strongest level since March 2018. Input prices jumped above its long-run average (67.4 pts), by 9.7 pts to 74.1, highest since October 2019. Selling prices only rose slightly by 0.4 pts to 51.2. Looking...

Weekly Economic & Financial Commentary: The U.S. Economy Continues to Start 2021 on a High Note

U.S. Review The U.S. Economy Continues to Start 2021 on a High Note In January, personal spending increased at a robust 2.4% pace, while personal income soared 10.0%. The core PCE deflator rose 0.3% during the month and 1.5% over the year. Fed Chair Powell testified in front of Congress...

Week Ahead – Rising Yields Spook Markets

Powell fails to ease concerns Everyone is watching the bond markets at the moment, as yields accelerate higher and investors become increasingly anxious. That is dominating the headlines and it’s unlikely to change next week, with the jobs report on Friday now even more significant. Country US It seems Wall Street is much...

Week Ahead – NFP to Guide Yields, RBA Could be a Yawn, Pound Turns to UK Budget for Boost

As a new month starts, investors will have their eyes locked on the latest nonfarm payrolls numbers out of the United States amid an accelerating selloff in bond markets. The Reserve Bank of Australia’s policy meeting will be the only central bank gathering of the week but is unlikely...

RBA Board to Hold the Line Next Week

The Reserve Bank Board meets next week on March 2. While we have seen extraordinary developments in bond markets over the last week, I do not think they will impact the Bank's key messages. We expect there will be no change in the policy settings and that the conclusion from the...

NY Fed Williams Expects The Strongest GDP Growth In Decades This Year

Markets It appeared that here is a thin line between market euphoria about a quick economic recovery fueled by intensive cooperation between fiscal and monetary policy on the one hand and fear that central banks will have to retrace on their commitment to support this cooperation for a prolonged period...

Australian Dollar Flirting with 80

The Australian dollar has posted slight gains on Thursday. Currently, AUD/USD is trading at 0.7976, up 0.011% on the day. Australian dollar crosses into 80 territory The Australian dollar has been on a tear, racking up gains of 4.3% in the month of February. This culminated in a breach of the symbolic...

Australian Dollar Flat

The Australian dollar is drifting for a second straight day. Currently, AUD/USD is trading at 0.7907, down 0.06% on the day. On the fundamental front, we’ll get a look at Australian Private Capital Expenditure (00:30 GMT). The indicator has managed only one gain in the past 10 quarters, but the...

European Open: Sterling Spikes, German GDP Up Next

Volatility from GBP pairs woke traders up in Asia. Meanwhile, Powell’s ‘Turnaround Tuesday’ comments for Wall Street failed to spill over to Asian equities. Asian futures: Australia's ASX 200 index fell by -61.4 points (-0.90%) to close at 6,777.8 Japan's Nikkei 225 index fell by -484 points (-1.61%) to close...

Sterling Stronger on Reopening Optimism, Dollar Stabilizes

Sterling rises broadly today as UK Prime Minister Boris Johnson said he's "hopeful" and "very optimistic " to end pandemic restrictions on June 21, based on the "one-way road to freedom" roadmap unveiled yesterday. Canadian Dollar is Dollar is following as second strongest, with a little help from oil...

Aussie Unlocks New Highs Ahead Of Q4 Capex

The Australian dollar has been moving sharply higher against the US dollar over the last month as investors are waiting for the capital expenditure data for the fourth quarter on Thursday at 02:00 GMT ahead of the GDP figure on March 3. In the meantime, the aussie is forming...

Dollar Soft as Markets Await Fed Chair Powell Testimony, Oil Jumps

Dollar stays generally soft in Asian session today as markets await Fed Chair Jerome Powell's testimony. The topics of inflation and surging treasury yields would be the focuses. For the former, Powell would likely talk down the significance of temporary rise in inflation, and focus on medium term outlook...

Australia goods exports dropped -9% mom in Jan, imports down -10% mom

Australia exports of goods dropped -9% mom to AUD 32.1B in January. The decline was led by 10% mom fall in export of metalliferous ores. Imports of goods also dropped -10% mom to AUD 23.4B, driven by -23% mom fall in road vehicles imports. Trades surplus narrowed slightly to...

Asian Open: Risk-off With A Twist Sends Wall Street Lower

Wall street was lower overnight as rising bonds yields continued to spook equity investors yet act as a tailwind for commodities and related forex markets. Asian Futures: The ASX 200 is expected to open flat with futures moving sideways overnight. Although Wall Street's negative lead could weigh on the index...

Swiss Franc Weak after Brief selloff, Yen and Dollar Also Soft

Swiss Franc was a focus in earlier European session as it suffered brief but deep selloff. Though, it somewhat found some footing quickly, even though it's still the second weakest for today so far. Yen is underperforming again on strong major global benchmark yields. Dollar and Canadian Dollar are...

NZD Surges on Rating Upgrade, Eyes on RBNZ This Week

New Zealand Dollar opens the week higher after ratings upgrade by S&P. The Kiwi would now look into RBNZ's comments on the economy and new economic projections featured later in that week. Elsewhere, overall risk-on sentiments continue to support commodity currencies and Sterling. On the other hand, Yen and...

Fitch affirms Australia rating at AAA with negative outlook

Fitch Ratings affirmed Australia's Long-Term Foreign-Currency Issuer Default Rating at "AAA" with a negative outlook. The rating reflects the country's "strong institutions and effective policy framework, which supported nearly three decades of economic growth prior to the coronavirus pandemic and helped limit the severity of the current shock" But the...

Week Ahead – Powell to the Rescue

Rising yields spook investors Jerome Powell’s appearances in Congress next week may come at the perfect time. Rising yields have made investors nervous and the Fed Chair may be the person to put their minds at ease. Meanwhile, Boris Johnson will lay out plans for the easing of the lockdown...

Week Ahead – Dollar Realigns With US Fundamentals, RBNZ Meets

There's been a striking change in the dynamics of the FX market lately, with the US dollar no longer trading exclusively as a safe haven and instead reacting to American economic data. Investors have their eyes on the Fed, even if it is too early to price in a...

Cliff Notes: Australia’s Labour Market on the Road to Recovery

Key insights from the week that was. This week begun on a quiet note given much of Asia were out celebrating Lunar New Year and the President’s day holiday was observed in the US. Since then however, several interesting data points have been received. The key data release for Australia this...

Australian Dollar Skyrockets on Surging Metal, Markets Cheer PMIs

Australian Dollar overtakes Sterling as the strongest one for the week, as supported by return of risk-mode markets. In particular, industrial metal is having strong rally with copper trading up 2% at the time of writing. Sterling shrugs off poor retail sales but was supported by PMI and upbeat...

Sterling Stays Strong as Focus Turns to Retail Sales and PMIs

Sterling continues to trade as the strongest one for the week, as focus turns to UK retail sales and PMIs. Upside surprises there could give the Pound another lift. Australian Dollar is keeping itself close as second strongest for now. On the other hand, Yen and Swiss France are...

Australia retail sales rose 0.6% mom in Jan, NSW led the rise but Queensland dropped

Australia retail sales rose 0.6% mom in January, below expectation of 2.0% mom. All states and territories rose, except for Queensland. NSW led the rises, up 1.0%, as Greater Sydney saw COVID-19 restrictions eased in January. Queensland saw a fall of 1.5%, with COVID-19 restrictions in Brisbane leading to...

Australia PMI composite dropped to 54.4, strong employment, higher inflationary pressure supply chain disruption

Australia PMI Manufacturing dropped to 56.6 in February, down from 57.2. PMI Services dropped to 54.1, down from 55.6. PMI Composite dropped to 54.4, down from 55.9. Andrew Harker, Economics Director at IHS Markit, said: "A key positive from the flash PMI data for Australia is the strongest pace of...