Opening Comment 03.16
The Bank of Japan has come out in Asian trade leaving the call rate unanimously unchanged at 0.10%, but has caught market participants off guard after adopting additional easing measures through the expansion (doubling) of last year’s money supply operation. On the data front, Australia’s leasing index of economic activity has come in at its highest levels in over a year, while Japan’s tertiary activity index has also come in above expectation.
However, despite the stronger data down under, the Aussie has been somewhat weighed down by some dovish comments from RBA watcher McRann, and some less than hawkish remarks from RBA Debelle who says that the upside to tightening is limited. Elsewhere, China headlines will not go away, with Treasury Secretary Geithner on the wires saying that China will ultimately decide that it is their interest to move to a more flexible exchange rate and that the US has not yet judged China as a currency manipulator.
Looking ahead, the Bank of England Minutes are due for release at 9:30GMT, along with the more highly anticipated claimant count (5.0% expected) and unemployment rate (7.9% expected). Eurozone labor costs (2.7% expected) and construction output then cap things off at 10:30GMT. US equity futures point to a slightly firmer open, while commodities are also mildly bid.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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