All eyes on Chinese industrial production

Australian Dollar:

The Australian dollar moved within a relatively tight range against the Greenback on Tuesday however was bolstered by a surprisingly upbeat NAB business confidence reading released just before midday. The NAB confidence exhibited business conditions at a four year high after a remarkable climb in construction activity underpinned by a myriad of construction approvals showing positive signs for the months to come. The Service industry was also a key highlight from NAB’s survey and a simultaneous release of a strong House Price Index helped the AUD rally to daily highs of 0.9268. Today the Aussie once again opens at a similar level (0.9268) as investors will watch the Westpac consumer sentiment data to get a gauge as to how individual’s confidence levels are tracking as opposed to businesses.

• We expect a range today of 0.9230 – 0.9310

New Zealand Dollar:

The New Zealand dollar spent Tuesday trailing off against most currencies as geopolitical events once again took centre stage seeing the riskier currency sold off in a market where economic data was absent. The Kiwi was lower again after the REINZ Housing price index was worse than previous at -0.7 per cent which shows a reduction in the selling price of all homes. During the European and US session’s markets remained subdued and the NZ dollar opens this morning marginally weaker at 84.34US cents. Once again there is no data today locally for the NZ dollar however Chinese numbers in the afternoon and US figures overnight should help to move the higher yielding currency.

• We expect a range today of 0.8395 – 0.8475

Great British Pound:

The British Pound opens this morning slightly stronger against the Greenback after recovering from new 8 week lows on Wednesday. The GBP dipped as low as 1.6758 after the US dollar was bolstered early on underpinned by geopolitical events once again taking the spotlight. Nonetheless the Sterling managed to recover gaining back all of the lost ground and more as market sentiment shifted through trade, shrugging away the previously highlighted concerns. The GBP was stronger against both the higher yielding Aussie (1.8138) and Kiwi (1.9929) and likewise climbed against a weaker Euro by just over a quarter of a per cent. Today investors will finally see some significant economic data which will bring volatility back to the market with the Bank of England’s inflation report accompanied with economic growth data from the UK.

• We expect a range today of 1.8100 – 1.8180

Majors:

The Euro was lower across the board overnight sparked by concerns over weak German Economic Sentiment. The ZEW data showed sentiment fell to 8.6 after a previous reading of 27.1 while forecasts were for 18.2 leading the Euro to fall sharply to lows of 1.3333. Germany is currently Russia’s largest trading partner in the Euro and the recent sanctions placed due to the geopolitical turmoil have weakened sentiment in the German nation. The Euro opens this morning having somewhat recovered from the fall at 1.3368 against the USD. Investors will finally have economic data to bring volatility to the market tonight with US retail sales and European industrial numbers being printed.

Data releases:

• AUD: Westpac Consumer Sentiment, Wage Price Index q/q
• NZD: No Data
• JPY: Prelim GDP q/q, Monetary Policy Meeting Minutes, Prlim GDP Price Index y/y
• GBP: Average Earnings Index 3m/y, Claimant Count Change, Unemployment Rate, BOE Gov Carney Speaks, BOE Inflation Report
• EUR: German Final CPI m/m, German WPI m/m, French CPI m/m, Industrial Production m/m, German 10-y Bond Auction
• USD: Core Retail Sales m/m, Retail Sales m/m, FOMC Member Dudley Speaks, Business Inventories m/m, Crude Oil Inventories, 10-y Bond Auction