Market Roundup
- Australian dollar dips to 6-year low against greenback.
- Euro hit a seven-year low against sterling at 70.79 pence and touched an 18-month low versus its Japanese peer at 129.48 yen.
- RBA AsstGov Kent - Policy to continue to support economy, further easing may be appropriate in future, little to suggest growth to rise near-term, despite fall, A$ remains relatively high given state of economy.
- BoJ Policy Board Shirai - Temporary slowdown in inflation acceptable, prices to become positive once crude oil prices stall, potential growth downtrend behind sluggish pace of recovery in domestic demand, potential growth to rise to just shy of 1%, inflation to accelerate sharply in H2 FY '15, CAPEX and consumption largest uncertainties.
- Japan Jan core machinery orders -1.7% m/m, +1.9% y/y, -4.1% and -1.0% expected, better than consensus but companies reluctant to boost CAPEX.
- Japan Feb domestic corp goods prices unch m/m, +0.55 y/y, as expected.
- Australia March Westpac/MI consumer confidence index -1.2% to 99.5, dips from 13-month high.
- Australia Jan owner-occupied housing finance -3.5% m/m, -2.0% consensus, investment housing finance -0.1%.
- New Zealand govt OBEGAL to Jan 31 NZ$77 mln, +112.1% vs forecast, debt 26.1% of GDP.
Economic Data Ahead
- (0130 ET/0630 GMT) France Q4 non-farm payrolls - revision; previous unchanged q/q.
- (0200 ET/0700 GMT) Sweden Feb unemployment; previous 8.1%.
- (0245 ET/0745 GMT) France Jan current account balance; previous E1.9 bln deficit.
- (0330 ET/0830 GMT) Sweden Feb CPI,+0.6% m/m,unchanged y/y consensus; previous -1.1%, -0.2%.
- (0330 ET/0830 GMT) Sweden Feb CPIF, +0.7% m/m, +0.7% y/y consensus; previous -1.0%, +0.6%.
- (0430 ET/0930 GMT) UK Jan industrial output, +0.2% m/m, +1.3% y/y consensus; previous -0.2%, +0.5%.
- (0430 ET/0930 GMT) UK Jan manufacturing output, +0.2% m/m, +2.6% y/y consensus; previous +0.1%, +2.4%.
Key Events Ahead
- N/A ECB Pres Draghi, Praet, Liikanen, Nowotny speak at Frankfurt conference.
- N/AEZ creditors-Greece to begin technical talks in Brussels and Athens.
- N/AItaly E6.5 bln 12-month BOT, Greece 13-week treasury bill auctions.
- N/ASweden treasury bill, Norway government bond auctions.
- (0530 ET/1030 GMT) Germany E5.0 bln zero% 2017 Schatz auction.
- (1000 ET/1500 GMT) BoE MPC Weale speech in London.
- (1025 ET/1525 GMT) Riksbank DepGov Floden in Stockholm panel discussion.
- (1125 ET/1625 GMT) BoE Stewart speech at London conference.
- (1500 ET/2000 GMT) RBNZ policy announcement, no change in 3.5% OCR expected.
FX Recap
EUR/USD fell to a new 12-year low on Wednesday, furthering its broad decline after the ECB launched its 1 trillion euro bond-buying programme this week. The pair has also been under pressure as Greece is set to resume talks with creditors in Brussels later in the day. It slid to 1.0666, the lows not seen since April 2003 and making way for 2003 trough of 1.0501. It currently trades at 1.0671. Bias remains with the bears and the pair could likely test the 1.02 support level.
USD/JPY resumed its upward move on Wednesday after briefly sliding from 121.22 to 120.85 early in Asia. The yen remains under pressure against the US dollar after Japan's core machinery orders fell in January raising concerns over Japan's recovery and supporting the case of further policy measure. On the topside, the immediate resistance is seen at 122.03 levels and above which gains could be extended to 122.57 levels. To the flipside, support is seen at 121 levels, and then at 120.48 levels.
AUD/USD plunged to a six-year trough of 0.7588 and is on its way to test 0.7451; it's lowest since May 18, 2009. On Wednesday, RBA Assistant Governor Christopher Kent said that weaker currency was starting to help the economy. Pair's intraday range seen at 0.7588-0.7645.
NZD/USD held just above a one-month low at 0.7278 as U.S. dollar strengthens and markets expect dovish outlook from the RBNZ's monetary statement on Thursday. It is likely to find support 0.7255, and then at 0.7215.
USD/CNY continued its choppy trade on Wednesday. Prior to market open, the PBOC set the midpoint rate at 6.1597 per dollar, weaker than the previous fix of 6.1572. The spot yuan opened at 6.2635 per dollar and was trading at 6.2622 at midday.
