US equities rose for a third consecutive day, the S&P500 currently up 2.0%, the NASDAQ rallied 4.2% in its biggest single day move since March as investors returned to the riskier technology sector. US Dollar gave up some ground amid easing US government bond yields. The yield on the benchmark 10-year Treasury note settled around 1.54% after hitting 1.62%.
Commodities, Brent crude oil futures fell 0.9% to $67.65, copper fell 2.0%, iron ore fell 5.8% to $163.35 – back at mid-Feb levels, and gold rose 2.1%.
Overnight Currency Ranges
AUD/USD 0.7621 0.7723
EUR/USD 1.18355 1.19155
GBP/USD 1.3803 1.39
USD/JPY 108.56 109.235
NZD/USD 0.7103 0.7179
USD/CAD 1.2591 1.2685
USD/CNH 6.5154 6.5628
AUD/JPY 83.14 83.91
AUD/NZD 1.0728 1.0762
A busy day ahead kicking off with RBA Governor Lowe speaking at 9am Sydney time. Markets will watch for comments on movements in bond yields, particularly after Lowe said in his post-Board statement this week that the Bank would do more than the scheduled A$200b in QE if necessary. Following this, China will release February CPI which is expected to remain at -0.3%yr in February, with slow services price growth the major drag. Headline US February CPI is expected to rise 0.4% - base effects will see an abrupt rise in annual growth over coming months
AUD/USD bounced out of yesterday’s low of 0.7621 before printing an overnight high of 0.7723. Demand has likely grown ahead of 0.7600 while offering interest at 0.7760/80 and again at 0.7820 should slow any meaningful appreciation toward the end of the week.
Event Risk Data Today
Australia: At 9:00am, RBA Governor Lowe will give a speech titled “The Recovery, Investment and Monetary Policy” to the Australian Financial Review Business Summit, Sydney. Following this, the March update of the Westpac-MI Consumer Sentiment index will be released. Local virus-related developments have mostly been positive over the month, brief lockdowns in Perth and Victoria having been lifted and vaccinations commencing. Developments have also been positive around the economy, with the December national accounts recording a robust 3.1% gain, labour markets continuing to surprise to the upside and a strong pick up now clearly evident across housing markets.
New Zealand: We expect to see another decline in retail card spending in February. In addition to the lack of international visitors, the Covid Alert Level was dialled up for several days late in the month. That took a bite out of spending in Auckland and the hospitality sector.
China: The CPI is expected to remain at -0.3%yr in February, with slow services price growth the major drag. Meanwhile, the February PPI is expected to jump sharply to 1.5%yr, likely a function of rising commodity and oil prices.
US: The CPI is expected to rise 0.4% in February - base effects will see an abrupt rise in annual growth over coming months. The February monthly budget statement is set to reveal that the deficit widened to 280bn; this trend will continue as further stimulus comes online.