Data:
Monday
- No real impactful data
Tuesday
- JPY BOJ Core CPI y/y: exp. 0.3%
Wednesday
- USD CB Consumer Confidence: exp. 108.4
- USD Richmond Manufacturing Index: exp. 4
- AUD CPI 1/1: exp. 0.8%
- AUD Trimmed Mean CPI q/q: exp. 0.5%
Thursday
- CAD BOC Monetary Policy Report
- CAD BOC Rate Statement
- CAD Overnight Rate: exp. 0.25%
- CAD BOC Press Conference
- AUD RBA Deputy Gov Debelle Speaks
- JPY Monetary Policy Statement & BOJ Outlook Report
- EUR Monetary Policy Statement
- USD Advance GDP q/q: exp. 2.6%
- USD Unemployment Claims: exp. 290K
Friday
- AUD Retail Sales m/m: exp. 0.3%
- CAD GDP m/m: exp. 0.7%
- USD Core PCE Price Index m/m: exp. 0.2%
Saturday
- USD Treasury Currency Report
AUDUSD Day’s Range: 0.74562 – 0.75123
Most of the data will be released on Thursday this week, including the rate statement from Canada and USD unemployment claims. Australian retail sales will be released on Friday.
AUDUSD dropped from its nearly 3-month high of 0.75465 that was posted on Thursday. RBA forced banks to defend its bond-yield target last Friday as the market tested its view on inflation outlook and forecast that low interest rate will remain until 2024. Governor Phillip Lowe remains dovish and keeps pushing back the case for early rate hike, however, the market continued to price in rate-hike from next year. RBA announced to purchase A$1 million of April 2024 government securities starting 26th February to defend its 0.1% yield target. The yield dropped more than 5 basis points to 0.12% after the announcement.
Evergrande Group made their bond coupon payment and risk appetite was supported. However, China’s new Covid-19 infection will increase in the coming days and the areas affected may continue to expand. The resurgence of the Covid-19 delta variant is likely to slow down the growth of the Asia economy. Chinese economy risk a deeper slowdown than investors realize as the Chinese President seeks to cut the economy’s reliance on real estate. Furthermore, the heavy regulation experienced by multiple sectors including education and technology, the energy shortage, and the resurgence of the pandemic will all have an impact on China’s GDP growth.
AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 dropped 0.11% , closed at 4544.90
- The Nasdaq 100 dropped 0.15%, closed at 15318.25
- The Dow Jones Industrial Average rose 0.21%, closed at 35677.02
- S&P/ASX 200 was little changed, closed at 7415.50
Currencies
- The Japanese yen traded at 113.51 per dollar
- The offshore yuan traded at 6.3828 per dollar
- The Bloomberg Dollar Spot Index fell 0.2% Friday
- The euro was at $1.1642
Bonds
- The yield on 10-year Treasuries declined seven basis points to 1.63% Friday
- Australia’s 10-year bond yield dropped four basis points to 1.76%
Commodities
- Brent crude oil was at USD/Bbl 85.60
- Gold was at USD/OZ 1793.22
- Iron ore was at USD/T 122.50