The RBA talks of rate cuts to pin back the Aussie Dollar as trade war jitters linger. Another quiet day on the stats leaves geopolitical risk in focus.
There were no material stats released through the Asian session to provide the majors with direction.
Outside of the numbers, the RBA released its monetary policy meeting minutes from the 7th May meeting.
The RBA monetary policy meeting minutes struck a dovish note, which was largely in line with the RBA Statement on Monetary Policy released back on 10th May.
Salient points from the minutes were as follows:
The Aussie Dollar moved from $0.69228 to $0.69130 upon release of the minutes. At the time of writing, the Aussie Dollar was up 0.04% to $0.6911, with RBA Governor Lowe next up for the Aussie Dollar.
At the time of writing, the Japanese Yen was down by 0.07% to ¥110.14 against the U.S Dollar, while the Kiwi Dollar was up by 0.02% to $0.6535. The early moves came in spite of trade war jitters plaguing the global equity markets.
In the equity markets, the ASX200 gave up some of its Federal Election result gains, down by 0.2%, at the time of writing. The Nikkei was down by 0.32%, with the Hang Seng down by just 0.08%.
Bucking the trend early on was the CSI300, which was up by 0.67%, partially reversing Monday’s heavy losses.
It’s another quiet day on the economic calendar, with just the Eurozone’s consumer confidence flash figures due out later today.
With little else for the markets to consider, we can expect the EUR to remain sensitive to today’s data. Last month, the EUR took a tumble on weaker numbers.
Outside of the stats, market risk sentiment will influence through the day. On top of the trade war chatter, the EU parliamentary elections will likely begin to creep into the market’s purview.
At the time of writing, the EUR was flat at $1.1166.
It’s a relatively busy day on the economic calendar. May CBI Industrial Trend Orders figures are due out this afternoon. While the figures have had a tendency to be overoptimistic, the BoE Inflation Report Hearings, taking place earlier in the day will likely overshadow the numbers.
BoE Governor Carney had recently spoken of the markets not reflecting a more aggressive rate path. An anticipated pickup in inflationary pressures is one of Carney’s concerns. Today’s hearings could raise the prospects of a near-term rate hike should the BoE see inflationary pressures building.
Geopolitical risk will remain the key driver, however. Theresa May’s Brexit deal, Nigel Farage and the Brexit Party and Theresa May’s successor are key drivers near-term. It’s a combination that continues to leave a no-deal Brexit scenario on the table…
At the time of writing, the Pound was up 0.02% to $1.2728.
May existing home sales figures are due out later this afternoon. While forecasted Dollar positive, the numbers are unlikely to have a material impact on the Greenback.
The extended U.S – China trade war continues to be the main area of focus. The fallout from Trump’s blacklisting of Huawei last week has been significant and this is likely to materially impact any progress on trade talks near-term.
At the time of writing, the Dollar Spot Index was up 0.02% to 97.954.
It’s another quiet day on the economic calendar. The Loonie has found strong support from a pickup in crude oil prices, with a lack of economic data turning out to be a positive influence.
While concerns over the ongoing U.S – China trade war are negative, OPEC’s pledge to manage supply is positive. The Loonie’s going to need more than a pickup in crude oil prices, however, ahead of next week’s Bank of Canada monetary policy decision.
The Loonie was up 0.02% at C$1.3426, against the U.S Dollar, at the time of writing.
With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.