9th March 2020 - Dollar keeps rallying on higher yields

Good Morning,

Market Headlines

The Dow Jones Industrial Average reached fresh record highs, the S&P also advanced, but the Nasdaq closed in the red. US appreciated against most of its major rivals, as US Treasury yields resumed their advances and flirted with their recent highs ahead of Wall Street’s opening. Investors were optimistic following weekend news related to the approval of US President Joe Biden’s bill on stimulus aid. The Senate passed it with some changes, and the House is expected to vote on it this Tuesday.

Commodities, Brent crude oil futures fell 1.8% to $68.10, copper rose 0.7%, iron ore fell 0.4% to $173.45, and gold fell 1.1%.

Overnight Currency Ranges

AUD/USD 0.7637 0.7723

EUR/USD 1.1846 1.1932

GBP/USD 1.3801 1.3865

USD/JPY 108.28 108.94

NZD/USD 0.7105 0.719

USD/CAD 1.2624 1.27

USD/CNH 6.5062 6.5498

AUD/JPY 82.89 83.73

AUD/NZD 1.0731 1.0763

AUD Thoughts

AUD traded to a low of 0.7637 overnight with demand around that level still likely to prove meaningful while offering interest at 0.7720 and again at 0.7760/80 should keep a lid on any initial move higher.

Event Risk Data Today

Australia: The February NAB business survey should continue to reveal that conditions are improving, with the survey trending higher in January to a robust +7.

New Zealand: ANZ Business Outlook survey expected to take a small step down in March. As well as the ongoing drag from the lack of international tourists, the temporary dialling up of Covid Alert settings will have added to uncertainty around the outlook, especially among service sector firms.

China: New loans are set to pull back in February, after surging before Golden Week (market f/c: CNY 950.0bn). Meanwhile, M2 money supply growth should remain elevated at 9.4%yr, but down from a peak of 11.1%yr in June 2020.

Euro Area: The final estimate of Q4 GDP is expected to remain unchanged at -0.6%qtr, -5.0%yr.

US: The February NFIB small business optimism index is set to lift to 96.5 on stimulus prospects.

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