Australia: The AUD reached its highest level since the 14th of January, following some good domestic data yesterday, while overnight, new Fed Chair Janet Yellen's first address to the House provided few surprises.
NAB business confidence and conditions for January came in at 8 and 4 respectively, beating their previous month figues of 6 and 3. Home loans were also positive, up both quarter on quarter and year on year for Q4.
This all saw the AUD spike from 0.8850 to above 0.9000, where it traded for the rest of yesterday's session. Last night provided few surprises from Yellen as she said the Fed would maintain the policy put in place by her predecessor, and appears likely to continue to scale back asset purchases as the economy continues to strengthen. She reiterated that the Fed expects economic output and employment to continue to improve this year and next. AUD reached a high of 0.9048 following these comments.
Today in Australia, consumed confidence will be the main focus. The Consumer Sentiment index fell by 1.7% in January, the third fall in the past 4 months, so some improvement is due given the recent strength in retail and housing indicators. Today also sees the Chinese trade data for January, which are expected to show the trade surplus easing back to $23.6bn in January from $25.6bn in December. Both exports and imports are expected to slow, but some of that will be due to the softer activity towards the end of January due to Chinese New Year.
Majors: US and European equities markets rallied overnight, with the Yellen speech being the main driver. The Dow and S&P are both up over 1%, while the Dax and FTSE are up 2% and 1.2% respectively. In the major currency crosses the USD is stronger against the yen but weaker against the NZD, CAD and GBP. The focus for today will likely be trade data out of China and Westpac consumer confidence data, while tonight sees the Bank of England inflation report, along with speeches from Carney and Draghi.
- 12 FEB AU Consumer Confidence Feb
- CH Trade Balance Jan
- CH Imports/Exports YoY Jan
- UK Bank of England Inflation Report
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