Both the US$ and stocks were firmer on Tuesday, with the stock indices making another all time high following some hawkish comments from various Fed board members, while European political uncertainty as we head towards the Dutch and French elections weighed on the Euro. The Cleveland Fed President Loretta Mester said that she would be comfortable raising rates at this point if the economy maintained its current performance, while Philadelphia Fed President Patrick Harker said that a March rise was on the table. Elsewhere, Oil rose more than 1% after OPEC said it was sticking to its deal to reduce output, while the metals remained rangebound.
The action will heat up today, with the focus likely to be on the FOMC minutes as traders attempt to glean some clue as to the timing of the next Fed rate hike. Ahead of that, The Aud$ could see some volatility with a speech from the RBA Governor, Lowe coming up, alongside the local Wage Price Index and the China House Price Index. Later on, the German IFO Business Climate/Expectations will be released, as will the EU CPI (exp -0.8%mm; +1.8%yy). From the UK comes the preliminary reading of the Q4 GDP (exp 0.6% qq, 2.2%% yy). Aside from the FOMC Minutes, the US session will see the Existing Home Sales and the API Weekly Crude Oil Stock Inventory.
EURUSD: Under pressure from concerns that the far right parties continue to do well in the polls ahead of the Dutch/French elections. FOMC Minutes to be the days focus.
USDJPY: Squeezing higher, underpinned by hawkish Fed speakers suggesting rate hikes to come sooner rather than later.
GBPUSD: Sterling gained by around 1% against the Euro, benefitting from the EU election uncertainties; Rangebound against the dollar.
AUDUSD: Rangebound. RBA Governor Lowe speaking today.
NZDUSD: Heavy, but above critical support. Pressured by the strong US$ and by the Fonterra auction results. GDT Price Index -3.2% & WMP -3.7%
STOCKS: US Indices at new all time highs as the rally continues.
METALS: Choppy but rangebound
OIL: WTI rose almost 2%, to three-week highs after OPEC said it was sticking to its agreement to cut production.
|INDICES / COMMODITIES|
|ASX SPI: 5765|
|OIL (WTI): 54.35|