USD continues to hold onto recent gains, Stocks bounced back from Friday’s crash but VIX remains over 30.0 and the RBA increased interest rates by 25 bp, not the 15bp most were expecting, to 0.35%. US ISM Manufacturing PMI – missed significantly at 55.4 vs. 57.5 & 57.1 last time. Yields jumped higher with 10-yr over 3.00% at one point. Gold slumped over 2% as yields rose, and Oil rose over $5 following news of EU threats (with Germany apparently in agreement) to cut n energy imports and ‘more n banks’ to leave SWIFT. Asian markets mixed and European Futures all higher.
Overnight RBA's Lowe: “Further increases in interest rates will be necessary over the months ahead”. (Last rate hike was 2011)
Today German Unemployment, EZ PPI & Unemployment, US Factory Orders and NZ Unemployment, Speech from ECB’s Lagarde. Earnings – AMD, Pfizer, Starbucks, BNP Paribas, Deutsche Post and Uniper. JPY & China closed.
Biggest FX Mover @ (06:30 GMT) AUDCHF (+1.10%) Rallied from RBA surprise. Lows yesterday at 0.6850 to 0.6985 highs (resistance) today. MAs aligned higher, MACD signal line & histogram moving higher, RSI 71, OB but rising, H1 ATR 0.0018, Daily ATR 0.0075.
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Stuart Cowell
Head Market Analyst
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