The U.S. Dollar is trading in mixed ranges against G10 peers this morning ahead of a relatively light day in terms of economic data
Earlier this morning we received data from the Mortgage Bankers Association showing that mortgage applications for the week ending February 20th rose slightly and the average 30-year fixed mortgage rate fell to its lowest point in nearly three and a half years. We will also be hearing from Richmond Fed President Barkin later this morning and will be receiving weekly petroleum stock inventory data shortly after.
Inflation concerns have eased slightly due to the crude oil prices declining for a second consecutive day. The labor market is also showing some promise with yesterday’s ADP private payroll numbers showing a 2-month high. The positive data, in conjunction with a more hawkish tone from Fed speakers, has led to Traders taking the position that rate cuts this year are much more unlikely than previously expected, and that should we get a cut, it is likely to come later in the year. Futures show a 51.2% chance of a 25-bps cut in September.
What to Watch This Week…
- Conference Board Confidence 10AM
- PPI January figures Friday 8:30AM
- Monex USA Online is always open
AUD ⇑
The Australian Dollar is the G10’s best performer against the Buck this morning following an overnight CPI release that printed higher than expectations. This indicates that a substantial softening would be required in February and March to be able to meet the Reserve Bank of Australia’s very conservative figures. As a result, it is likely that the RBA will hike interest rates one more time in this cycle, with that hike being expected in May.
JPY ⇓
The Japanese Yen is the G10’s worst performer versus the Greenback this morning following an announcement that two policymakers who are seen as being in favor of additional fiscal stimulus were nominated to join the Bank of Japan’s board. Both individuals are fundamentally dovish, and their appointment reinforces the idea that the Japanese government is looking for the BoJ to hike interest rates as slowly as possible.
