he first half of this week is pretty slow for news and because of this, the street may pay more attention than usual to the few releases that are out there. One release, however, that often has a significant impact on Asia Pacific trading is the RBA minutes, the latest of which are due today.
The minutes could potentially have an impact on trading in both AUD and S&P/ASX along with NZD. For the last few days resource dollars have been on the rise with their central banks neutrality emerging as a more hawkish position relative to the super easy Fed, ECB and Bank of Japan. The RBNZ confirmed at its last meeting that it is still considering raising interest rates next year. The street may then look to the RBA minutes to see if Australia’s central bank is still backing away from future easing or if it is keeping its options open. The recent rally suggests traders are expecting a more hawkish statement, a dovish one could come as a surprise.
It has been another record setting day for stock markets in North America and Europe with the Dow, S&P and Dax hitting new all-time highs. The Dow broke through the 16,000 big number barrier while the S&P has been testing 1,800 and the NASDAQ Composite has been flirting with 4,000. These moves, combined with a USD retreat indicate that traders expect US tapering to be delayed and for monetary stimulus on both sides of the Atlantic to continue for some time (except perhaps in the UK).
Tomorrow morning’s ZEW investor survey and flash PMI later in the week may give traders a better idea of how much pressure the ECB is under to take additional action following last month’s interest rate cut.
Highlights of overnight announcements include:
US NAHB housing market index 54 vs street 55
Upcoming significant announcements include:
11:30 am AEST Australia RBA meeting minutes
4:00 pm AEST Japan leading indicator street 109.5
10:00 am GMT Germany ZEW current street 31.0
10:00 am GMT Germany ZEW expectations street 54.0 vs previous 52.8
10:00 am GMT Eurozone ZEW expectations previous 59.1
12:00 pm GMT Turkey interest rate decision 4.50% no change expected
There are no major announcements scheduled for the US or Canada tomorrow.