Headlines:
- RBA leaves cash rate unchanged at 0.10%, as expected
- Small changes make all the difference for the RBA today
- RBA rate hike calls brought forward after the hawkish step today
- Will May be too soon for the RBA to act?
- EU to step up sanctions on Russia
- Germany would back EU ban on Russian coal, but only if done gradually - source
- French stocks fall, election risks starting to kick in?
- Eurozone March final services PMI 55.6 vs 54.8 prelim
- UK March final services PMI 62.6 vs 61.0 prelim
Markets:
- AUD leads, JPY lags on the day
- European equities mixed; S&P 500 futures down 0.1%
- US 10-year yields up 5.5 bps to 2.467%
- Gold down 0.3% to $1,927.40
- WTI up 0.6% to $103.97
- Bitcoin up 0.9% to $46,704
The main highlight of the day came arguably just before European trading kicked in, as the RBA took a step towards tightening policy. There was no change to the cash rate but the central bank did play around with the language, dropping the notice on "patience" when viewing inflation developments moving forward.
That saw the aussie jump as markets raced to price in a more aggressive RBA, with rate hike calls being brought forward from August to June mostly. AUD/USD moved up from 0.7535 to 0.7630 levels, its highest since June last year. The kiwi also benefited from the move, with NZD/USD jumping 0.9% to back above 0.7000.
Meanwhile, Europe is looking to punish Russia with more sanctions with coal this time on the agenda. It will be the region's first attempt at sanctioning Russian energy, though still excluding oil and gas at least. Equities were more tepid overall but French stocks are dragged lower as election risks are starting to creep in.
Besides that, the bond market selloff continues to play out as Treasury yields push higher again with 2-year yields nearing 2.50% and 10-year yields also hovering around 2.46% currently.
In FX, USD/JPY wasn't much of a mover though but it did recover from 122.50 to 122.80 after BOJ governor Kuroda tried to jawbone the yen earlier in the day. The euro remains more lackadaisical after the drop below 1.1000 yesterday, hovering around 1.0960-70 against the dollar.
In the commodities space, oil is holding up well despite all the talk on reserve releases. WTI crude is keeping close to $104 again and if that isn't enough to keep prices down below $100, I reckon that's a good sign for the bulls at least.
