15th February 2021 - China and the US celebrate holidays, quieter day expected ahead

Good Morning,

Market Headlines

The US Dollar fell on Friday as Wall Street soared, with the three major indexes posting record closes, and long-term bond yields reaching one-year highs. Poor US employment-related data and comments from Federal Reserve’s officials, indicating a long way ahead of reaching full employment, were behind it, fuelling stimulus hopes. Commodities, Brent crude oil futures rose 2.7% to $62.45, copper rose 0.4%, and gold fell 0.1%.

China and the US celebrate holidays this Monday, which means diminished movements may exacerbate moves linked to fundamental headlines.

Overnight Currency Ranges

AUD/USD: 0.7719 – 0.7764

EUR/USD: 1.2082 – 1.2131

GBP/USD: 1.3776 – 1.3862

USD/JPY: 104.79 – 105.18

USD/CAD: 1.2677 – 1.2763

NZD/USD: 0.7178 – 0.7230

AUD/JPY: 81.06 – 81.48

AUD/NZD: 1.0731 – 1.0759

AUD Thoughts

With the US celebrating the President’s Day holiday and Chinese New year celebrations continuing another quieter day is expected ahead, although things are expected to pick up with a raft of data due over the remainder of the week. The highlight’s of the week include GDP and the FOMC minutes from the US, inflation data and PMI’s from the UK, and the RBA minutes and the employment report from Australia.

AUD continued to push higher into the weekend with the broad based USD weakness seeing the AUD/USD close at 0.7760. The key resistance level at 0.7820 is the one we now watch for the week ahead and is in sight with fresh supply expected ahead of that level while demand likely rest back toward 0.7700.

Event Risk Data Today

NZ: January REINZ house prices and sales are due today. Markets expects that the property market’s strength will continue into the early part of this year, supported by record-low mortgages rates. The January update of the Business NZ PSI will also be published; the closure of the border remains a drag on services.

Japan: Q4 GDP is expected to show that Japan’s economic recovery continued over the three months to December, led by strong export growth (market f/c: 2.4%).

China: Golden Week will continue through to Wednesday.

US: President’s Day Holiday, Equity and bond markets closed.