Daily Market Commentary - 23rd February 2012
The Australian dollar ended Wednesday near 3-week lows against the U.S. dollar and 4-week troughs against the euro, while global investors hemmed and hawed at the prospect of increasing their exposures in riskier assets. Market participants continued to reel from the string of developments from the start of the week, including Greece’s pristine second bailout package, the Reserve Bank of Australia’s dovish meeting minutes released Tuesday, and China’s dour PMI results yesterday.
The United Kingdom’s pound was the worst performer among the majors, after the Bank of England’s February meeting minutes echoed the RBA’s message of elevated short-term downside risks. The BoE bolstered their quantitative easing program by 50 billion pounds on February 8th, though the meeting’s minutes suggest some participants called for an increase of 75 billion pounds. The minutes also noted a drop in productivity levels in the U.K., which may pose undue burdens on the output gap and labour costs, along with the potential to further erode corporate margins. Sterling closed Wednesday at session lows against the Aussie and kiwi, and weekly lows against the U.S. dollar.
There are no major Australian economic results expected today, though reports on Germany’s Ifo survey, U.K.’s CBI trends and America’s jobless claims should keep investors occupied tonight.
Key Releases
| Indicator | Actual | Forecast | Previous |
|---|
| AU Q4 Wage Price Index | 1.0% | 0.8% | 0.7% |
| CN Feb HSBC Flash PMI | 49.7 | - | 48.8 |
| DE PMI Manufacturing (Feb) | 50.1 | 51.5 | 51.0 |
| DE PMI Services (Feb) | 52.6 | 53.9 | 53.7 |
| EU Feb PMI Manufacturing (Feb) | 49.0 | 49.5 | 48.8 |
| EU Feb PMI Services (Feb) | 49.4 | 50.6 | 50.4 |
| UK Feb BoE Meeting Minutes | - | - | - |
| US Jan Existing Home Sales | 4.57M | 4.65 | 4.38 |
