Daily Outlook – Tuesday 21st February
Yesterdays Presidents Day Bank Holiday in the U.S. lead to subdued price action overnight. Indices and currency markets trading in tight ranges.
The UKs House of Lords did however start debating the Brexit Bill, if approved will trigger Article 50, which sets out how an EU country might voluntarily leave the European Union. Over the coming three weeks, politicians will debate the bill and propose and vote on amendments. The 9th and 10th of March will see British Prime Minister Theresa May meet with EU leaders in Brussels, where Article 50 may be formally triggered. The coming weeks will no doubt lead to market volatility across GBP and Euro Indices and Currencies, creating opportunities for traders.
Eurozone finance ministers agreed on Monday night to continue talks on economic reforms required to ensure continued austerity. Budget cuts will be eased and a focus will be placed on ‘deep reforms’ according to Jeroen Dijsselbloem, the Eurozone’s top official.
Today sees the RBA release its Monetary Policy Minutes at 11:30AM (AEDT) and a slew of PMI numbers out of Europe later tonight between 7:00 – 8:00PM (AEDT).
Traders will be eyeing todays minutes for any comments on increasing inflation, changes to the GDP growth outlook contained in the recent Quarterly release and of course direction on the 1.5% cash rate, which is expected to be in place for some time.
Deutsche Bank’s chief economist Adam Boyton suggesting the AUD/USD could breach the 80c level due to strengthening commodity prices (Australian coal, iron ore and gold exports account for approx. 45% of total exports) and relatively high yielding government bonds.
