In This Article:
Earlier in the Day:
It was a relatively quiet day on the Asian economic calendar this morning. There were no material stats through the Asian session to provide the markets with direction.
While there were no stats, the RBA meeting minutes from the 4th February meeting garnered some attention in the early part of the day.
Updates from China and the rest of the world on COVID-19 cases and the number of deaths also influenced early on.
According to the latest numbers, the total number of deaths in China rose to 1,868, up by 98. Across China, the number of cases had increased from 70,548 to 72.436 on Monday.
While the numbers continued to show a slower pace of infection, companies were busy delivering warnings, with Apple announcing that it would not meet its quarterly earnings forecast due to the virus outbreak.
Risk aversion early on in the day drove demand for the safe havens…
For the Aussie Dollar
The RBA meeting minutes once more weighed on the Aussie Dollar, with the minutes revealing a willingness to ease policy further.
According to the 4th of February minutes,
-
The Board reviewed the case for a further cast rate reduction and took into account current interest rate levels and long and variable lags in the transmission of monetary policy.
-
It was also noted that incremental benefits of further rate cuts needed to be weighed against the risks associated with very low-interest rates.
-
In considering the policy decision:
-
The outlook for the global economy remained reasonable, with signs that the slowdown in global growth was coming to an end.
-
Progress in addressing the U.S – China trade and tech disputes reduced downside risk to the economy.
-
The Covid-19 outbreak, however, was a source of uncertainty.
-
For the Australian economy, the outlook was for growth to improve, while the effects of the bushfires were temporarily weighing on domestic growth.
-
Household spending remained weak. While house prices have been recovering, it was too soon to see household spending figures respond.
-
The Aussie Dollar moved from $0.67067 to $0.66954 upon release of the minutes. At the time of writing, the Aussie Dollar was down by 0.36% to $0.6690.
Elsewhere
At the time of writing, the Japanese Yen was up by 0.15% to ¥109.72 against the U.S Dollar, while the Kiwi Dollar was down by 0.34% to $0.6414.
The Day Ahead:
For the EUR
It’s a relatively busy day ahead on the economic calendar. ZEW economic sentiment figures out of the Eurozone and Germany for February.
Forecasts are EUR negative, with the expected impact of COVID-19 likely to affect business sentiment.