Originally published by Rivkin Securities
The euro dropped -0.36% on Monday along with European equity benchmarks following a weaker than anticipated retail PMI report and ahead of Thursdays ECB monetary policy decision. While no changes are expected the market will be listening to see if we get a less dovish tone from Mario Draghi as the economic outlook continues to improve. The DAX declined -0.57%, as did the CAC 40 -0.46% and the Euro Stoxx 600 -0.52% while German sovereign yields declined with both the two and ten-year down -1.7 and -1.1 basis points respectively.
Month-on-month for February Eurozone retail PMI declined from 50.1 to 49.9 as rising price pressures squeezed business margins and sales underperformed. Still the rise in purchase prices bodes well for the Eurozone inflation outlook and the report also showed a rise in employment. Tonight the focus will be on Euro-zone GDP (QoQ & YoY Q4) with +1.7% growth expected over the 12 months.
The US Dollar Index gained +0.12% with the dollar up against most major peers following higher than anticipated durable goods orders (MoM Jan). Orders rose +2.0% from +1.8% prior and only +1.0% forecast. A core measure of capital goods which excludes aircraft that is used for GDP calculations declined -0.1% although at a slower rate than the -0.4% previously reported. Both the S&P 500 and Nasdaq 100 saw some profit taking, trading -0.33% and -0.24% weaker while US treasury yields were little changed.
Locally the Australian dollar was -0.18% weaker at the time of writing while the S&P/ASX 200 gained +0.30% on Monday. This morning we can expect a softer start to trading with ASX SPI200 futures down 8 points in overnight trading. Today the RBA will decide on monetary policy with no changes expected to the +1.5% cash rate released at 2:30pm today with policy unlikely to be changed in the coming months. Elsewhere Commonwealth Bank Of Australia. (AX:CBA) and ANZ Banking Group (AX:ANZ) executives will appear today in Canberra before the House of Representatives Standing Committee on Economics as part of the annual review while Westpac Banking Corporation (AX:WBC) executives will follow on Wednesday.
Data releases:
· RBA Decision 2:30pm AEDT
· German Factory Orders (MoM & YoY Jan) 6:00pm AEDT
· US Halifax House Prices (MoM Feb) 7:30pm AEDT
· Euro-zone GDP (QoQ & YoY Q4) 9:00pm AEDT
· US Trade Balance (MoM Jan) 12:30am AEDT