- Australian retail sales disappoint in December, -0.1% MoM against expectations of +0.2%, increasing liklihood of RBA rate cut tomorrow
- Job ads on other hand show biggest rise in 2 years, up by 6%, which might convince RBA to stay on hold
- One Australian newspaper thinks RBA may leave rates on hold tomorrow on back of strong US data on Friday
- General consensus in market is that RBA will stick by previous signals and cut by 25bps
- Australian TD-MI inflation gauge steady at 0.2% MoM
- Greek PM still meeting with government partners in attempt to agree on new round of spending cuts
- Government meetings with Troika also still ongoing
- Greece’s two biggest labour unions set to hold 24-hour strike on Tuesday
- Juncker: Greek default still a possibility
- Chinese Premier Wen: China needs to help Europe due to strategic considerations
- BOJ Shirakawa: Economic situation severe due to deflation and strong Yen
- Regional stocks +0.8% on average, Gold $1736/oz, Oil $97.25/bbl
- Geo-political situation in Middle East affects risk sentiment, with focus on Syria and Iran
EUR/USD opened lower in early interbank trade on the back of continued uncertainty regarding the Greek debt situation. The Greek government partners are still not agreed on the level of spending cuts and this is holding back negotiations with the Troika. More planned union strikes didn’t help sentiment. EUR/USD closed in NY on Friday at 1.3145, fell to 1.3076 in early interbank trade, rallied to 1.3130 on the ASian open and then fell back below 1.3100. Ranges: 1.3079/1.3129
AUD/USD has been weighed on as risk sentiment was weakened by uncertainty regarding Greece, the Middle East and tomorrow’s RBA. AUD/USD fell to 1.0750 from its NY closing level at 1.0770, in early interbank trade and then fell again to 1.0716 on the headline retail sales number. A closer look at the job ads data helped an immediate recovery but since then some tight trailing stops below 1.0710 were targeted and triggered. Ranges: 1.0706/69
USD/JPY has again been fairly quiet in a 76.46/76 range. EUR/CHF 1.2055/75; cable 1.5769/1.5821
