NEWS / Foreign Exchange

RBA Leaves rate on hold despite rumors of a 25 bps hike

Very quiet Asian session with most majors staying within the ranges of the NY sesison. Stocks advance as oil goes lower. Fixed income head lower across the board with Gilts leading.

Overnight News Bullets

• UK PMI Construction March, out at 58.9 vs 57.3
• Euro-Zone PPI Feb, out at 0.3%& in line with exp. (YoY) out at 2.9% vs 2.8% exp.
• US Pending Home Sales Feb,out at 0.7% vs -0.5% exp.
• US Total Vehicle Sales March,out at 16.3M vs 16.5M exp.
• US Domestic Vehicle Sales March,out at 12.3 vs 12.7 exp.
• US ABC Consumer Confidence April 1, out at -5 with a prior reading of -2.
• UK Nationwide Consumer Confidence March, out at 88 vs 86 exp.
• AU RBA leaves Cash target at 6.25% as exp.
• AU AiG Performance Service Index March,out at 50.6 vs a prior reading of 54.5.
• NZ ANZ Commodity Price March, out at 2.0% vs a prior reading of 1.6%.
  

Markets

• FX: Aussie slides as RBA keep rates on hold. JPY weak as the negative CPI reading from Friday lingers.
• Fixed Income: Bunds lower, but US T-notes remaining range bound ahead of Fridays NFP data.
• Stocks: US stocks recovers with Nikkei up 1.9% in the Asian session.
• Commodities: Still range bound with crude oil dropping a bit from the recent highs.
  

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What's going on?

• RBA held rates steady today, but a chance of a future rate hike is still very likely. The market is currently pricing 12-13 bp for the May meeting. CPI reading in late April will be a key oindicator to the RBA.
• BoJ's Mutu hit wires in Asia saying that rate adjustments will be gradual and prolonging low rates may hamper growth. Standard comments but USDJPY remain bid. We look for a break in Europe of 119.00 to send the pair for test of the 120.00 level.
• European stocks back on track and is bound to test the highs from February, presently at 7,040 in DAX.
  

FX