Global Markets:
- Asian stock markets: Nikkei up 0.60 %, Shanghai Composite and Hang Seng both gained 0.70 %, ASX 200 rose 0.55 %
- Commodities: Gold at $1314 (-0.35 %), Silver at $19.32 (-1.50 %), WTI Oil at $45.90 (+0.35 %), Brent Oil at $47.35 (+0.40 %)
- Rates: US 10 year yield at 1.58, UK 10 year yield at 0.3, German 10 year yield at -0.02
News & Data:
- Australia NAB Business Confidence Q2: 2 (prev. 4)
- NZ Net Migration SA June: 5670 (prev. 5500)
- New Zealand Credit Card Spending (MoM) Jun: -0.8% (prev. 0.0%)
- New Zealand Credit Card Spending (YoY) Jun: 4.1% (prev. 5.9%)
- Japanese government preparing JPY20trln stimulus & JPY 9trln fiscal spending package: Sources – RTRS
- PBOC sets yuan reference rate for today at 6.6872 (vs. yesterday at 6.6946)
- S&P GDP forecasts China & Japan: 6.6% and 0.7% (Go on, have a guess)
- RBNZ: Likely that further policy easing will be required
- Goldman Sachs on the RBNZ – cite today's statement for more cuts coming
Markets Update:
The biggest move in the major pairs overnight was seen in NZD/USD, which collapsed after the RBNZ released an economic update report. The central bank said that further policy easing will be required and expressed concern about the overvalued New Zealand Dollar. A rate cut by the RBNZ next month seems now increasingly likely.
AUD/NZD rallied from 1.0630 to 1.0730 after the release and consolidated in a 1.0700-30 range for the rest of the session. NZD/USD plunged from 0.7030 to 0.6950, but bounced from there and made it back to 0.6995.
Meanwhile, AUD/USD received some slight support from the AUD/NZD flows and rose from 0.7460 to 0.75. However, the technical outlook remains bearish after the break below the key 0.75 support level.
USD/JPY broke above 107 yesterday and extended gains to 107.40 in the early Tokyo session. The topside was capped there for now, but the pair remains well bid and support is now seen at 106.80 & 106.20.
EUR/USD rose slightly overnight, from 1.1000 to 1.1045. The focus today will be on the ECB meeting, where the bank is expected to keep all rates unchanged. The ECB will announce its rate decision at 12:45 BST and the press conference will begin at 13:30 BST.
Upcoming Events:
- 07:00 BST – Swiss Trade Balance
- 09:30 BST – UK Retail Sales
- 12:45 BST – ECB Rate Decision
- 13:30 BST – ECB Press Conference
- 13:30 BST – US Initial Jobless Claims
- 13:30 BST – US Philadelphia Fed Manufacturing Index
- 14:00 BST – US House Price Index
- 15:00 BST – US CB Leading Index
- 15:00 BST – US Existing Home Sales
