– Let’s face it – Shaun Marsh’s ton, the IPL auction, the start of the footy season with the Collingwood-Geelong clash and Torah Bright’s silver medal will be hot topics in dealing rooms all around Australia this morning. But with due respect to all that, probably the most interesting things overnight came from central bankers, with the ECB board member Benoit Coeure saying the ECB was actively considering negative interest rates. And in the UK, the Bank of England surprised by upgraded its growth forecast from 2.8% to 3.4% while keeping their inflation outlook unchanged.
– The impact on this was that sterling surged to 1.6590, up 0.89%, while euro fell to 1.3594, down 0.32%.
– European stocks liked the combination however, with the DAX up 0.65%, the CAC up 0.53% and the FTSE MIB in Milan rising 1.30%. Stocks in Madrid fell 0.10% and the FTSE in London lagged the continental bourses due to fears of a change in the BoE’s accommodative interest rate policies, with UK 10-year gilts up 8 basis points to 2.82%.
– In the US, early strength gave way to weakness with the Dow down 0.19% and the S&P off a point to 1819. The Nasdaq was 0.24% higher.
– Locally on the ASX overnight, the SPI 200 March Futures contract is up 8 points to 5270 bid. It’s make or break time for the SPI 200 as it is now testing trendline resistance dating back to the recent high in November 2011. Elsewhere the IMF has handed out some advice to Australia on the Aussie dollar, interest rates and the budget surplus.
– The Aussie dollar is down a little after the Chinese data yesterday that showed exports and imports crushed expectations drove it to a high of 0.9067. It sits this morning at 0.9031. USDJPY is lower as well, down 0.16% at 102.46 this morning.
– Gold’s rally continued and although it is off its highs, it is up $5 an oz at $1291.70 this morning. Nymex crude’s strength continued even though the EIA showed a much bigger build in stocks than expected and it rose a little to $100.25 Bbl. Copper rallied strongly on the Chinese data, up 5 cents or 1.39% per lb to $3.31.
On the data front, it is a huge day for markets in Australia with the release of the January employment report. The unemployment rate is expected to be unchanged by the pundits but jobs are forecast to rise by 15,000 over the month. Guy Debelle, RBA assistant governor is also speaking today. Offshore, Chinese new loans will be interesting as will German CPI and jobless claims and retail sales in the US tonight.