- RBA holds cash rate at 0.10%, as expected
- Full text of the December 7, 2021 RBA monetary policy decision
- China trade balance $71.72B vs $82.75B expected
- China to lower relending rate for small and agricultural companies
- Australia Q3 home price index +5.0% vs +5.0% q/q expected
- UK data - BRC Sales like-for-like for November +1.8% y/y vs -0.2% prior
- Japan Oct household spending -0.6% y/y vs -0.6% expected
- Japan Oct labor cash earnings +0.2% vs +0.7% y/y expected
- China cut RRR yesterday, will the LPR be next?
Markets:
- Gold flat at $1777
- US 10-year yields up 1.4 bps to 1.448%
- S&P 500 futures up 16 points
- Nikkei 225 +2.4%
- WTI crude oil up 74-cents to $70.23
- AUD leads, JPY lags
The RBA decision was the main event of the day but there were other positive tidbits of data and the overall tone continued to show some optimism about omicron.
The Australian dollar climbed a dozen pips in the aftermath of the RBA as they emphasized household spending and business investment above the omicron variant. The guidance continued to suggest no rate hikes until mid-2023 in opposition to market pricing for a July hike but how that goes will depend on inflation and covid.
Other commodity currencies tracked AUD as oil prices rose.
Chinese trade data showed surging imports and that could be a sign along with yesterday's RRR cut that China wants to turn on the growth taps. Where that wasn't reflected was in Chinese stocks, which finished poorly yesterday and are treading water today despite a positive start. There's talk of an LPR cut.
USD/JPY continued its recovery and has now completely erased Friday's drop with yields in the US now above Friday's level.
There wasn't much news on the omicron front but cases in South Africa aren't accelerating any more, though test positivity is sensationally high. Everyone in the market is looking for a sliver of good news an we've seen how quickly the market can look past covid when the news begins to improve.
