S indices were relatively quiet for most of the day and finished near flat not providing much momentum. FOMC minutes created a brief bit of noise but it didn’t last long. The minutes appeared to have a bigger impact on currency markets
, where indications that some members would like to see more improvement on jobs before tapering sent USD lower even though the meeting was before June’s spectacular jobs increases were announced.
Commodities have been climbing again today with US crude and gasoline putting in strong performances on the back of another round of big decreases in inventories. Gasoline has rallied to retest $3.00 while US crude has closed the spread with UK crude to under $2.00/bbl. Copper also rebounded today despite the soft Chinese trade data.
Currency markets saw JPY testing 100.00 against USD and EURUSD on the rebound back above $1.2900. Resource currencies also started to recover earlier losses, setting the stage for what could be an active day for trading across the Asia Pacific region.
The day starts off with New Zealand’s PMI report and then moves to the main event, the Australian jobs report. These numbers may give a better indication of how much pressure the RBNZ or RBA are under to intervene in currency markets (the former) or cut interest rates (the latter).
Later in the day, the Bank of Japan meeting could keep the pot boiling. With the major new QE program now three months old, the street may see an update on progress but with data having improved of late, changes appear unlikely. Still, with so many major announcements, we could see quite a bit of action in AUD, NZD and JPY pairs along with the Aussie 200 today.
Late Breaking News: At his speech this afternoon, Fed Chairman Bernanke suggested that highly accommodative monetary policy remains necessary and that unemployment hitting 6.5% may not automatically trigger interest rate increases. This could put USD under further pressure today and may help AUD and NZD to break out of their bases if local data turns out supportive.
Highlights of overnight announcements include:
US crude oil inventories (9.8mmbbls) vs street (3.2mmbbls)
US gasoline inventories (2.6 mmbbls) vs street 1.0 mmbbls
Germany consumer prices 1.8% as expected
France industrial production 0.4% vs street (0.2%)
France manufacturing prodn (0.8%) vs street (0.5%)
Italy industrial production (4.2%) vs street (4.8%)
Greece industrial production (4.6%) vs previous (1.8%)
Upcoming significant announcements include:
TBA Brazil interest rate 50 bps increase to 8.50% expected
8:30 am AEST NZ Business PMI previous 59.2
11:00 am AEST South Korea interest rate 2.50% no change expected
11:30 am AEST Australia employment street no change expected
11:30 am AEST Australia full time previous (5K)
11:30 am AEST Australia part time previous 6K
11:30 am AEST Australia unemployment rate street 5.6%
2:00 pm AEST ish Japan interest rate no change expected
2:00 pm AEST ish Japan 2014 monetary target street ¥270T no change expected
8:30 am EDT US jobless claims street 340K
8:30 am EDT Canada new house prices street 1.9%
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