Asia’s focus was on the Bank of Japan today, awaiting its announcement after a two-day meeting.
After an unusual delay, the BOJ announced no change in interest rates, holding then steady at 0.1 percent (what else can they do?) while there were no new easing steps announced. The decision to leave rates unchanged was unanimous but one member proposed increasing the asset buying and loan scheme by an additional ¥5 tln. USDJPY eased off after the announcement.
Other data releases: NAB’s measures of Australian business activity were mixed, with business conditions improving slightly from +2 to +3 in February but business confidence slipping to +1 from +4. A deteriorating external outlook and high Ozzie dollar were among factors affecting confidence, and this filtered through to a lower employment index (from +1 to zero) and forward orders dipping one point to -2. Measures of sales and profitability improved a few ticks to +8 and +2 respectively. Overall, NAB commented that the surveys were consistent with underlying growth of around 3.5-3.75 percent and GDP of 3.25 percent in early 2012. AUD was broadly unchanged on the data.
Elsewhere, GBP showed little reaction to slightly better UK housing data with the RICS house price balance easing to its slowest pace of decline in 10 months in February. The balance edged up to -13 percent from -16 percent while price expectations for the next 3 months climbed to zero from -14. Expectations for the next year rose to +11 percent from -4 percent, the first time they have been above zero in almost 2 years. A 2-year stamp duty exemption for first-time buyers is helping short-term sentiment while a potentially better economic outlook is boosting longer-term expectations, said the survey. GBP continued to underperform following its sell-off yesterday.
Yesterday’s overnight session saw most currency pairs treading water with tight ranges all around and no data to push momentum either way. The EUR failed to extend its Friday losses amid steady demand on dips and the Asian low proved elusive in European and US trade. GBP was one of the weaker performers overnight, falling through the 55-day MA technical support.
There were no data releases in the US session and currencies continued to trade in tight bands. Wall St was mixed after one of the quietest sessions this year with the DJIA closing up 0.29%, S&P +0.02% and the Nasdaq falling 0.16%.
Data Highlights
GE Feb. Wholesale Price Index out at +1.0% m/m, +2.6% y/y, both as expected vs. 1.2%/3.0% prior resp.
US Feb. Monthly Budget Statement out at -$231.7 bln vs. -$229.0 bln expected and -$222.5 bln prior
NZ Feb. REINZ House Price Index out at +0.8% m/m vs. -1.4% prior
NZ Feb. REINZ House Sales out at +37.0% y/y vs. +25.2% prior
NZ Feb. QV House prices out at +2.9% y/y vs. 2.7% prior
JP Jan. Tertiary Industry Index out at -1.7% m/m vs. +0.2% expected and revised +1.8% prior
UK Feb. RICS House Price Balance out at -13% vs. -14% expected and -16% prior
AU Jan. Home Loans out at -1.2% m/m vs. -0.6% expected and revised +2.1% prior
AU Feb. NAB Business Conditions out at +3 vs. +2 prior
AU Feb. NAB Business Confidence out at +1 vs. +4 prior
Upcoming Economic Calendar Highlights
(All Times GMT)
Swiss PPI (0815)
Sweden CPI (0830)
UK BOE’s Tucker to speak (0835)
UK DCLG House Prices (0930)
UK Trade Data (0930)
GE Bundesbank publishes 2011 accounts (1000)
GE ZEW Surveys (1000)
EU ZEW Survey (1000)
EU ECB’s Draghi to speak (1130)
US NFIB Small Business Optimism (1130)
US Retail Sales (1230)
US IBD/TIPP Economic Optimism (1400)
US JOLTs Job Openings (1400)
US Business Inventories (1400)
US FOMC Rate Announcement (1815)
Andrew Robinson,
SAXO BANK