US equities fell for a third consecutive day, the S&P500 down 0.8% with US Treasury yields also easing. Worse-than-expected US employment-related data provided short-lived support, but yields ended the day in the red. The European Central Bank published the Accounts of its latest meeting, and as the US Federal Reserve did a day before, policymakers noted that ample monetary stimulus remains essential within the current pandemic context. Tepid US employment-related data somehow confirmed slowing progress in the sector and justified the Fed’s concerns.
Market players await news on US stimulus and easing restrictive measures in Europe. Coronavirus immunization through vaccines continues with encouraging news coming from those countries in where campaigns are more advanced. Still, Pfizer and Moderna noted their shots are less effective against the South African strain.
Commodities, Brent crude oil futures fell 1.1% to $63.65, copper rose 2.3%, and gold fell 0.1%.
Overnight Currency Ranges
AUD/USD: 0.7732 – 0.7789
EUR/USD: 1.2037 – 1.2090
GBP/USD: 1.3841 – 1.3986
USD/JPY: 105.60 – 105.92
USD/CAD: 1.2666 – 1.2730
NZD/USD: 0.7177 – 0.7223
AUD/JPY: 81.79 – 82.30
AUD/NZD: 1.0757 – 1.0796
AUD saw some selling pressure in the first half of the US trading session, dropping from mid-European session highs of only about 10 pips away from the 0.7800 level to session lows just above the 0.7730 mark. However, over the last few hours, the pair has recovered back into the green and now trades in the 0.7760s, up about 0.2% or around 15 pips on the day.
Looking ahead, Markit will be releasing Australia’s preliminary February PMI report at 22:00GMT, an event that will certainly be worth watching for the AUD traders. Thereafter, preliminary Retail Sales data for January is set to be released at 00:30GMT and will also be worth watching. Otherwise, attention remains on USD dynamics and the themes driving global risk appetite such as the pandemic, stimulus and central banks.
The AUD/USD was steady overnight and settled around 0.7750 once again. The range of 0.77315/.77895 means order books likely remain unchanged. Demand is expected ahead of 0.7700 while offering interest is expected at 0.7805 and again ahead of 0.7820.
Event Risk Data Today
Australia: Retail sales for January are estimated to have risen 2.0% m/m, following a 4.1% fall in December.
NZ: PPI inflation for Q4 is expected to follow the theme of CPI inflation (released last month) and reflect Covid-related supply shocks.
US: Markit PMIs are released, the manufacturing survey sitting up at 2018 levels. We also have home sales for January, a 2.4%m/m decline expected. There’s also Fedspeak from Barkin and Rosengren.