AUD has been the top performing major currency of the last 24 hours. Although Governor Stevens tried to talk the dollar down further in yesterday’s RBA statement, he did not intervene in forex trading and continues to chart a middle course between the RBNZ’s intervention strategy and the Bank of Canada’s totally hands off approach. With NZD close to where the RBNZ backed off its intervention efforts last year, both NZD and AUD have started to rebound, taking advantage of a pause in USD’s big advance. Gold has also continued to climb, trading above $1,210 through much of the day although crude oil was knocked down again. European indices have been trading lower through the day with continental indices dragged for 1%+ losses across the board by poor German industrial production data and the IMF downgrading its growth forecast for Germany raising more concerns about the health of the Eurozone economy. Japan was also downgraded which could impact trading in JPY and Nikkei today. The Dow weakened throughout the day but fell particularly hard right into the close finishing down nearly 275 points and sending negative momentum into today’s Asia Pacific trading. An earnings miss and guidance cut from Yum! May leave a bitter taste in traders mouths that could carry right through to tomorrow’s action particularly since the company blamed the shortfall on its China operations. The Nikkei may continue to soften in opposition to the rebound in JPY while the S&P/ASX has been retreating along with many of its counterparts elsewhere. The Hang Seng, however, could go its own way again as the risk protests could destabilize the economy continue to ease with protestors agreeing to meet with the government on Friday. China service PMI and monetary policy commentary from Japan may also influence trading a bit in some markets but today appears mainly to be a day for positioning ahead of tomorrow’s US Fed minutes, Alcoa’s official kickoff to earnings season and the Australian employment report. Corporate News Yum! Brands $0.87 vs street $0.89, cut earnings growth forecast to 6-10% from 20%+, China same store sales (14%) yuck!! Economic News Significant announcements released overnight include: IMF 2015 GDP growth forecasts World cut to 3.8% from 4.0% US raised to 2.2% from 1.7% Brazil cut to 0.3% from 1.3% Japan cut to 0.9% from 1.6% China 7.4% unchanged Germany cut to 1.4% from 1.9% Italy cut to (0.2%) from 0.7% France cut to 0.4% from 0.8% UK 3.2% unchanged Canada building permits (27.3%) vs street (6.5%) UK industrial production 2.5% vs street 2.6% UK manufacturing production 3.9% vs street 3.4% Germany industrial production (2.8%) vs street (0.5%) Norway industrial production 2.3% vs previous (2.8%) Upcoming significant announcements include: 12:45 pm AEDT China HSBC service PMI previous 54.1 4:00 pm AEDT Japan monthly economic report 8:00 am BST UK Halifax house prices street 9.6% 8:00 am BST Spain industrial output street 0.9% 8:15 am EDT Canada housing starts street 198K 8:30 am EDT US Fed Evans speaking 10:30 am EDT US crude oil inventories street 2.0 mmbbls 2:00 pm EDT US FOMC meeting minutes
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