RBA Unexpectedly Keeps Rates Unchanged @ 4.25%
The RBA did not move 25 basis points lower as expected instead kept rates unchanged, moving the Aussie higher against all its counterparts, moving ~8 pips higher against the USD initially. The RBA added the following comments suggesting there was room to move on rates if demand weakened:
- Financial Market sentiment remains skittish, has improved.
- Term funding markets have reopened.
- Economic growth close to trend.
- Labor markets softened during 2011.
- CPI inflation has declined as expected.
- Year end CPI to fall further in next quarters.
- Underlying inflation is about 2.5%.
- Credit growth remains modest.
- House signs show some sign of stabilizing at end of 2011.
- Terms of trade have started to decline.
Shirakawa Says Japan’s Economy in Severe Situation
BRC Sales
BRC same store sales declined by less than expected at -0.3% in January versus the estimate of -0.8%. Cable had a muted reaction to the release.
China’s Industrial Profits YTD
China’s Industrial Profits for 2011 on a year over year basis rose 25.4% versus the prior increase of 24.4%.
China Sets Yuan Reference Rate @ 6.3102
China Non-Manufacturing PMI
China’s Non-Manufacturing PMI in January came in at 52.9 softer than the prior reading of 56.0. The market had a muted reaction to this release with risk trading a touch lower
UK Lloyd’s Business Baromoter
The Lloyd’s Business Barometer in January improved to -11 from a -23 reading the prior month. Sterling has traded to the bottom of its January bullish channel today and a break lower could moved the pair back toward the middle of the 1.55 handle.
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