Mon, Mar 01, 2021 @ 12:39 GMT
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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...

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...

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...

Is The Dollar Near A Potential Tipping Point?

Markets Global markets yesterday again showed sharp swings as investors tried to adapt positions to the developing reflation narrative. European markets took a cautious albeit constructive start. However, trading on US interest rate markets turned very volatile. US yields jumped sharply higher with the 10-y and the 30-y setting new...

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...

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...

Dollar Rebounds Further on Strong Retail Sales, Euro and Swiss Franc Suffer

Dollar's rebound gains much momentum in early US session with a little help from much stronger than expected retail sales data. Canadian Dollar is following as second strongest for today, riding on rally resumption in oil prices. On the other hand, Euro is suffering some steep selling together with...

Dollar Firm after 10-yr Yield Breached 1.3, But Near Term Resistance Still Intact

The strong rally in US treasury yield overnight pushed Dollar notably higher. The greenback is indeed the second strongest one for the week, just next to Sterling. Canadian Dollar is following closely with support by resilience in oil prices. ON the other hand, overall risk-on sentiment is keeping Yen...

Australia leading index rose to 4.48% in Jan, points to above trend growth in 2021

Australia Westpac leading index rose from 4.24% to 4.48% in January. The data points to "above trend growth in the Australian economy through 2021". Westpac expects 4% GDP growth in 2021, led by consumer spending, which contributes to around 3% to the overall growth rate. As for RBA policy, Westpac...

RBA Kent: Aussie could be 5% higher without RBA policy

RBA Assistant Governor Christopher Kent said in a speech that some factors have contributed to the appreciation of the Australian Dollar since November. The factors include "general improvement in the outlook for global growth" and a "marked increase in many commodity prices". Iron ore prices "has increased by around 40...

Dollar Strikes Back on Surging Yields, Gold Tumbles

Dollar is striking back today with some help from surging US yields. At the time of writing, 10-year yield is trading above 1.25 handle. Additionally, much stronger than expected manufacturing is support the greenback too. While European stocks are treading water, US futures point to higher open. Yen is...

RBA Indicates Support to Continue

The Australian dollar has posted slight gains on Monday, continuing the trend we saw at the end of the last week. Currently, AUD/USD is trading at 0.7777, up 0.20% on the day. RBA minutes indicate QE will be prolonged There were no surprises from the RBA minutes, and the response from...

Euro Weak With Dollar in as Stock Surge Further, Looks into German ZEW

Overall developments in the markets are unchanged as strong risk-on sentiments continue. Yen is currently the worst performer by a mile. Dollar, Euro and Swiss Franc are following behind. Sterling continue to stay strong together with commodity currencies. A focus today is on whether Germany ZEW economic sentiment and...

RBA Minutes: Some years before inflation and unemployment goals achieved

Minutes of RBA's February 2 meeting noted that a number of major central banks had already announced extensions of their QE program. There was also a widespread expectation for RBA to extend its own. Hence, "if the Bank were to cease bond purchases in April, it was likely that...

(RBA) Minutes of the Monetary Policy Meeting of the Reserve Bank Board

Videoconference – 2 February 2021 Members participating Philip Lowe (Governor and Chair), Guy Debelle (Deputy Governor), Mark Barnaba AM, Wendy Craik AM, Ian Harper AO, Steven Kennedy PSM, Carol Schwartz AO, Catherine Tanna, Alison Watkins Others participating Luci Ellis (Assistant Governor, Economic), Christopher Kent (Assistant Governor, Financial Markets) Anthony Dickman (Secretary), Ellis Connolly (Deputy...

Reserve Bank Board Minutes – No Surprises

The RBA’s Minutes of the February Board meeting contain a robust defence of the bond buying policy – we can certainly expect a continuation of that policy beyond October. The Board’s concerns about achieving its wages and inflation targets resonate supporting our view that the Yield Curve Control policy...

Cliff Notes: Optimism Over Recovery Remains Strong

Key insights from the week that was. In February, Westpac-MI consumer sentiment recovered roughly half the ground lost in January. This result leaves sentiment only marginally below the 10-year high achieved in December. Looking at the detail of the report, consumers are clearly very positive on the outlook for the...

Dollar Selling Resumes after Jobless Claims, Yen Crosses Rising

Dollar is back in selloff mode in early US session after slightly worse than expected jobless claims numbers. Though, at the time of writing, Yen underperforms mildly. On the other hand, buying focus is back on commodity currencies today. Australian Dollar is leading others higher. European majors are generally...

Dollar Decline Slows But No Bottoming, Euro Softens

The forex markets are rather quite in Asia today, following subdued trading elsewhere. Dollar's decline is slowing but it remains the worst performing major currency so far, followed by commodity currencies. Sterling and Yen are the stronger ones this week, as both are supported by rallies in respective treasury...

RBA Harper: Still plenty of excess capacity in the economy

RBA board member Ian Harper said there's "still plenty of excess capacity in the economy". The tendency for monetary stimulus to product an asset-price bubble is "way off where we're presently headed". Policymakers indeed wanted asset prices to be increasing to speed up investment. Harper added, "the bank can...

Weekly Economic & Financial Commentary: International Growth Outlook Still Mixed

U.S. Review Better Numbers Nonfarm employment rebounded in January, with employers adding 49,000 jobs following the prior month's 227,000-job drop. The annual revisions to the prior data provide a more accurate assessment of job losses during last spring's lockdown, as well as the subsequent recovery. Job losses in March and...

Cliff Notes: Extraordinary Policy Easing Justified Despite Strong Global Recovery

Key insights from the week that was. For Australia, the past week had a strong focus on monetary policy as the RBA Board met; Governor Lowe spoke at the National Press Club then appeared before Parliament; and lastly, the February Statement on Monetary policy was released. Tuesday’s RBA decision provided an...

Dollar Drops Broadly Following NFP Disappointment

Dollar drops broadly in early US session after much smaller than expected non-farm payroll job growth, even though unemployment dipped notably. Canadian Dollar is some what pressured today after larger than expected job losses. But Yen is the one following the greenback as second weakest. Australian Dollar and Euro...

Dollar Strong in Risk-On Markets, Non Farm Payrolls in Focus

Return of risk-on markets, after some solid economic data, pushed S&P 500 and NASDAQ to new record highs overnight. Yen and Swiss Franc trade broadly lower naturally but Euro was not far behind. Commodity currencies, while firm, are so far overwhelmed by Sterling and Dollar. In particular, the greenback...

RBA Lowe: Interest rates to be low for quite a while yet

RBA Governor Philip Lowe told a parliamentary committee that the central bank was committed to do "everything it reasonably can" to to push the unemployment rate lower and drive wages growth higher. However, even in the most optimistic scenario, inflation won't be back to its target band before 2023. "The...

Euro Stays Weak Despite Better CPI, Dollar Shrugs Strong ADP Job Growth

Economic data released today are largely ignored so far. Euro's weakness continues despite stronger than expected inflation reading. Swiss Franc and Sterling are also softening slightly. Dollar, on the other hand, struggles to extend gain after much stronger than expected ADP employment. New Zealand Dollar continues to trade as...

Kiwi Rises on Job Data, Loonie Firm on Oil Price, Euro and Franc Weak

Canadian and New Zealand Dollar are both in the driving seats in the markets this week. Return of risk appetite is providing the base for rally. Meanwhile, Kiwi is lifted by stronger than expected job data while Loonie follows oil prices higher. Aussie is lagging behind on RBA, however....