Another Fine Performance
A mixed batch of Chinese economic data over the weekend led to some initial jitters for the Australian dollar at the Asia open, but risk appetite soon steadied again. USDJPY remained firm in the wake of Friday’s surprisingly upbeat US payrolls report and comments from BoJ Governor-nominee Kuroda had little impact. He made his second parliamentary appearance in as many weeks overnight – this time speaking before the Upper House. The hearing mainly produced a repeat of last week’s remarks, but this time Kuroda directly addressed the interest rate paid on excess reserves, and he made it clear a cut might still be an option. More generally he again stressed his willingness to do whatever it takes to boost inflationary pressures if his appointment is confirmed (supporting out view that another round of easing is on the cards). We expect a parliamentary vote on the matter in both houses either on March 14th or 15th. Elsewhere, EURCHF still looks reasonably well supported ahead of Thursday’s SNB policy decision. This price action is typical ahead of these quarterly policy meetings but the key question is whether gains in the cross can be sustained in the wake of what we expect will be an unchanged policy decision.
Click here to read the full report: UBS Morning Adviser
UBS Investment Bank