Oil Erases Gains As Saudi – Russia Deal Falls Short Of Expectations

Today’s Economic events

RBA releases monetary policy meeting minutes

China M2 money supply y/y 14.0% vs. 13.50%

New Zealand inflation expectations q/q 1.60% vs. 1.90%

UK CPI y/y 0.30% vs. 0.30%; Core CPI y/y 1.20% vs. 1.30%

UK PPI Input m/m -0.70% vs. -1.20%; PPI Output m/m -0.10% vs. -0.20%

Germany ZEW Economic sentiment 1.0 vs. 0.1

Eurozone ZEW Economic sentiment 13.6 vs. 10.3

US Empire state manufacturing index -16.64 vs. -10.0

Canada manufacturing sales m/m 1.20%vs. 0.80%

Coming up

New Zealand Global dairy trade index

US NAHB housing market index

US TIC Long-term purchases

The markets opened today on a risk-on mode following two days of gains (Friday and Monday) but the risk on environment quickly evaporated into the European trading session. The Yen, which declined steadily to test intraday highs of 114.81¥ was seen trading firmer. At the time of writing, USDJPY is down -0.74% trading at 113.7¥. The equity markets managed to close modestly higher with the Nikkei225 closing with modest gains of 0.20% while the Shanghai Composite rallied 3.32%.

The commodity risk currencies were trading mixed in today’s session. NZDUSD is down -0.94% for the day, trading at $0.658. Yesterday, quarterly retail sales data from New Zealand showed a less than expected increase of 1.20%. The median consensus was expecting retail sales to have risen 1.40%. Core retail sales for the quarter were higher at 1.40%, beating estimates of 1.10%. The Kiwi, however, remained muted and continued to decline steadily after briefly posting an intraday high to $0.6674 as New Zealand Premier John Key expressed surprise that the NZD has not yet declined, tracking the nearly 10% – 20% decline GDT index. New Zealand GDT index declined -7.4% two weeks ago and a fresh set of data is due for release later this evening.

The AUDUSD was, however, unaffected, as the Aussie was seen trading briefly above yesterday’s highs of $0.716, it is now up 0.26% at the time of writing. The RBA’s monetary policy meeting minutes released today showed the RBA’s willingness to wait and assess more economic data. It acknowledged domestic pickup in growth and preferred to watch and see if the labor market was indeed strengthening. Australia’s monthly employment data is due for release on February 18^th.