Money
Money is entered in a cash register. Reuters/Carlo Allegri

Bell FX Currency Outlook: The Australian Dollar has been an innocent bystander as some disappointing US data saw the USD pullback.

Australia: The RBA Minutes from the March Board meeting will be closely watched today given the Bank’s surprise decision to keep rates on hold. The economic data under discussion at the meeting would have been quite weak – the spike in the unemployment rate in January and the very disappointing investment plans reported in the Q4 CAPEX report– so it will be interesting to see if the Minutes provide any insight into what stayed the Bank’s hand. There should also have been some discussion of the upcoming Financial Stability Review (due for release on 25 March). This review is likely to provide some insight into the RBA’s thinking on the imbalances in the housing market (namely investor lending in Sydney) and how the announced APRA measures are likely to impact. Clearly, the degree to which these measures are successful in dampening some of the speculative elements in the housing market will have implications for monetary policy.

Majors: The USD retreated from 12-year highs on profit taking by investors, with initial moves extended following weaker-than-expected US dataflow. The NAHB housing index disappointed, back to the level of mid- 2014 and the Empire manufacturing survey 6.90 from 7.78. Together, last night’s numbers have pulled the Citi US economic surprises index down another 3.7 points to -63.8 (the lowest since mid-July 2012). US Treasuries rallied and the curve flattened, while euro area sovereign bond yields were up slightly, but remained near historical lows for most countries. European stocks extended recent gains, with the lower euro and the commencement of the ECB’s QE program continuing to buoy stocks. The German DAX rose 2.2% to a record high, and the Euro Stoxx 50 gained 1.4%. US bourses also advanced, albeit in a thin session of trading. Oil prices declined to new six year lows, with WTI crude oil falling a further 1.1% to USD44 per barrel on expectations that US supply will continue to rise.

Economic Calendar 17 MAR

  • AU RBA March Meeting Minutes
  • JN BoJ Policy Statement/Press Conference
  • EC CPI Feb
  • US Housing Starts/Building Permits Feb

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