RBA day today, with the rates and minutes release at 2:30pm. Expectations are for the bank to remain on hold at 1.50%, due to the balancing act of low inflation, a two-speed economy and a housing unaffordability crisis on the eastern seaboard. It’s likely the bank will wait until May to make any concrete decision on rates after it sees employment figures on 13 April, and inflation figures on 26 April.
EUR/USD appears to be consolidating in the 1.0653 – 1.0675 range after last weeks’ dovish tone from the ECB saw the currency sell off. Further support at 1.0633 should the pair squeeze long positions and grind lower – a good value trade for fresh buyers. Pressure on the Pound overnight as manufacturing activity slowed to the lowest activity levels in eight months.
Gold rose overnight as lower than expected auto sales in the US seemed to spur expectations of a more dovish Fed, however the commodity was only up $2 from yesterday’s Asian session open. Over the last week Gold has struggled to find a direction, ranging between 1,261 – 1,251.
Some indecision overnight as US stocks were slightly down on the session after rebounding from session lows. As the Trump trade loses steam, US markets are edging lower, but only slightly. Dow Jones (-0.06%), S&P500 (-0.16%).
The ISM manufacturing index read for March hit 57.2, falling from the previous month’s level. Construction spending rose 0.8 percent in February to its highest level in nearly 11 years and vehicle sales hit an 11-month low.
US Ten-Year Bonds have rallied to yield 2.33% off the back of recent sluggish US data, also supported by economic growth headwinds because of a potential 6 rate hikes in two years. This puts a lot of focus on this week’s US economic releases – particularly Fridays Non-Farm Payroll figures.
European stocks were lower overnight with FTSE (-0.55%) DAX (-0.45%) and CAC (-0.71%) all experiencing losses as financial stocks closed -1.35% and a bomb exploded on the St Petersburg Metro killing 11 people.
Today’s economic calendar (AEST)
Bank holiday in China today.
APAC Session:
11:30am Australian Trade Balance
2:30pm Australian Cash Rate & Statement
EUR & US Session:
6:30pm UK Construction PMI
7:15pm RBA Gov Lowe speaks
10:30pm Trade Balance
12:30am ECB President Draghi Speaks
