- New Zealand Q4 current account deficit NZD2.8 billion
- NZ FinMin expects deficit to increase
- Australian economy: BREE sees higher resource and energy earnings
- China bank profits could be overshadowed by bad loans
- Copy of Bernanke’s prepared remarks published early
- Fed’s Kocherlakota hints at exit strategy
- Regional bourses -0.5% on average
- Gold $1652/oz; Oil $106.50/bbl
The Japanese financial markets were back on board today but they didn’t help with much improved volatility as we’ve again had fairly quiet trade in Asia. A minor AUD rally after the BREE report and a barrier play in EUR/JPY were the only moves of note.
AUD/USD opened in Asia near 1.0475, rallied in early Australian trade on a mixture of profit taking after overnight falls, and a reaction to the BREE report. The gains weren’t able to be sustained above 1.0500 and the pair fell back quickly below as the market frets on China. Ranges: 1.0464/1.0527
EUR/USD was again driven by EUR/JPY flows and there were also rumours of stop-loss buy orders in EUR/USD above 1.3285 but they seemed to be unreliable. EUR/USD opened at 1.3235 and has edged its way higher on the cross flows against the JPY and the AUD. Ranges: 1.3221/83
USD/JPY was supported by talk of Sovereign demand just below the market as well as ongoing buying of EUR/JPY. There are nevertheless still plenty of grateful sellers after the big rallies of recent weeks ensuring that we remain short-term rangebound. Ranges: 83.51/74
Cable 1.5854/94; EUR/CHF 1.2054/64