News and views
The NY session saw mixed price action for asset markets with equities building on recent gains but commodities slightly softer. US equities saw modest gains, though fi nancials had another positive session. Following yesterday’s Metlife/ AIG announcement, Barclays Plc noted it was seeking another major US retail bank acquisition though no deal was imminent. Citigroup shares extended recent gains to hit the highest levels seen since December. The widely watched BKX bank index also hit the highest level seen since early December. The fl ipside of this move was gold which slid 0.5% on comments from China that it will ‘be prudent ion buying gold’. Crude is also down 0.7% as traders book profi ts ahead of 82.50. Copper slid 0.5%.
The USD is slightly firmer helped by softer oil and gold. GBP gave up recent gains and sits just beneath the 1.50 level having hit a high of 1.5197 yesterday. EUR continued to mark time in very well rehearsed ranges. However, the ‘commodity bloc’ had a much better session. USD/CAD continued to push towards key support at 1.0225.
AUD saw a low of 0.9056 in London but this was met by solid demand and we quickly pushed higher towards 0.9140.
The NZD saw similar price action hitting a low in London 0.6962 but also quickly pushed back up above 0.7030.
US NFIB small business survey remained depressed in February, falling back from 89.3 to 88.0, a levels last seen in mid 2009, with respondents citing shortage of customers concerns about the economy and credit availability as constraining factors. However small business intentions to fi re workers remained at their recent lows, suggesting less drag on jobs growth from this important sector in coming months.
US IBD-TIPP economic optimism slips from 46.8 to 45.4 in Mar, the weakest reading since 45.3 in March last year. Deteriorating personal fi nances and the economic outlook were the main factors behind the slippage, which suggests downside risk for both the UoM sentiment and CB confi dence indicators later this month.
Mixed US weekly retail reports. The Redbook retail average slipped from 1.6% to 0.7% in the fi rst retail week of March, contrasting with a 2.9% surge in the weekly chain store sales measure, which has been volatile around a rising trend over the past month.
UK visible trade defi cit widens to £8.0bn in Jan, the widest defi cit since Aug 2008, refl ecting an 8% fall in export volumes vs a 22% fall in imports. There is little obvious impact here from sterling depreciation on the UK’s trade performance. The outcome adds to the downside risks surrounding the Q1 GDP growth report, due next month.
UK BRC retail sales index jumps from –0.7% yr to 2.2% yr in Feb, refl ecting a recovery in spending after the VAT hike and snowstorm impacted January. Also, the RICS house price survey found the net balance of surveyors reporting higher prices fell from 31% to 17% in Feb.
Outlook
AUD/USD and NZD/USD outlook next 24 hours: AUD has immediate resistance at 0.9140 and support around 0.9070. A break above 0.9140 would add to upside risks. Today sees two important releases with the Westpac Consumer Sentiment release plus housing fi nance. NZD’s levels are 0.7080 and 0.6950, with all focus now on the RBNZ Thursday and retail sales on Friday.
