There was only minor movements in the main asset classes. US equities remained elevated, the S&P500 currently up 0.1%. Commodities: Brent crude oil futures fell 0.7% to $68.75, copper was little changed, iron ore fell 1.2% to $163.60, and gold rose 0.1%
Overnight Currency Ranges
AUD/USD 0.7706 0.7774
EUR/USD 1.1911 1.19675
GBP/USD 1.3854 1.3950
USD/JPY 108.92 109.365
NZD/USD 0.7170 0.7216
USD/CAD 1.2442 1.2512
USD/CNH 6.4930 6.5167
AUD/JPY 84.14 84.69
AUD/NZD 1.074 1.0803
A busy day ahead beginning with the RBA Minutes. The RBA Minutes could provide more colour on discussions around the 3-year bond yield target and the promise to do more QE if necessary..
US retail sales for February are likely to show that spending slowed considerably after January’s stimulus induced gain. Through mid-month high frequency data were suggesting a modest increase. The headline measure may be softer than core readings, reflecting weak auto sales volumes during the month.
AUD/USD remained in a relatively tight range to start the week in the 0.7750 region although it did dip quickly to 0.7706 lows on the suspension of the vaccine rollout in parts of Europe in response to blood clots. Offering interest remains thick ahead 0.7820 and should prove hard to breach this week while meaningful buying interest should materialise if we drift back toward 0.7620/40.
Event Risk Data Today
Australia: The Minutes of the RBA’s March Board Meeting will provide further colour around the latest monetary policy decision. The Q1 AusChamber-Westpac Survey will be released - In Q4, the Actual Composite improved to 48.4 after rising to 42.8 in the September quarter. This recovery followed the dramatic fall to 24.0 in the June quarter associated with the initial lockdown and the response to Covid. Weekly payroll jobs and wages will be published for the week ended 27th Feb.
New Zealand: GDT dairy auction tonight, expectations of a a 2% fall in whole milk powder prices, following an outsized 21% gain at the previous auction. Futures markets currently predict a 4% fall.
Euro Area: The ZEW survey of expectations moderated at the end of 2020. Ahead of the March update, the survey is approaching its post COVID highs.
US: January total net TIC flows will provide an update on the purchase and disposal of US Treasury securities – of late, selling in Japan has been offset by purchases in the UK and China. The import price index is expected to lift 1.1% in February, with fuel and industrial supplies driving the recent lift. February retail sales are expected to edge down 0.3% after an outsized 5.3% rise last month. Meanwhile, industrial production is set for its fifth consecutive expansion (market f/c: 0.6%). Business inventories are still rising, but are set to increase by a more modest 0.3% in January. Finally, the March NAHB housing market index should hold around 84, firmly above pre-COVID levels.