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5 Mar 2014
European open: Some risk appetite returns as Ukrainian crisis shows some respite
FXStreet (London) - Asian markets overnight saw an easing of risk aversion as tensions in the Ukraine saw some respite. However market may be waiting to see any signs of strengthening in the US labour market in Friday’s non-farm payroll report before they show a committed return to riskier assets.
The Aussie dollar was the strongest performer overnight as fourth quarter GDP beat expectations. The economy grew 0.8 percent quarter-on-quarter compared to consensus expectations of a 0.7 percent gain, and climbs from 0.6 percent in the third quarter. Year-on-year GDP climbed to 2.8 percent against expectations of a 2.5 percent rise, with the third quarter reading upward revised from 2.3 percent to 2.4 percent. The stronger-than-expected growth nevertheless remains below trend, and unlikely to shift the RBA’s position. However the combination of increased risk appetite for higher-yielding currencies and stronger numbers helped boost demand for the Aussie dollar, up 0.14 percent to USD0.8968 after hitting a high of USD 0.8993 following the GDP print.
Chinese February HSBC/Markit Services PMI came in at 51 versus a consensus expectation of 50.7.
In Europe this morning we have the final reading of February services PMIs as well as of fourth quarter Eurozone GDP. For the composite PMI we saw big revisions in either directions, so the numbers will be more than a foregone conclusion.
In UK services PMIs due today it is hoped that we will see some pickup from recent declines, however consensus expectations are for a still-strong 58.0 print after January’s 58.3.
The Bank of Canada will almost certainly hold its 1 percent overnight rate today, with recent stronger-than-expected fourth quarter GDP numbers all but concreting the fact. However, the central bank will be less than exuberant in its accompanying monetary policy, given the broad downside risks and below trend growth still facing Canada.
Ahead of Friday’s non-farm payroll print, where consensus expectations are for a 150k print to pick up from last month’s 113k, focus will be on ADP employment change numbers, expected to print lower at 160k after last month’s 175k. In addition, expectations are for the ISM non-manufacturing index to print lower to 53.5 after 54.0 in January.
The Aussie dollar was the strongest performer overnight as fourth quarter GDP beat expectations. The economy grew 0.8 percent quarter-on-quarter compared to consensus expectations of a 0.7 percent gain, and climbs from 0.6 percent in the third quarter. Year-on-year GDP climbed to 2.8 percent against expectations of a 2.5 percent rise, with the third quarter reading upward revised from 2.3 percent to 2.4 percent. The stronger-than-expected growth nevertheless remains below trend, and unlikely to shift the RBA’s position. However the combination of increased risk appetite for higher-yielding currencies and stronger numbers helped boost demand for the Aussie dollar, up 0.14 percent to USD0.8968 after hitting a high of USD 0.8993 following the GDP print.
Chinese February HSBC/Markit Services PMI came in at 51 versus a consensus expectation of 50.7.
In Europe this morning we have the final reading of February services PMIs as well as of fourth quarter Eurozone GDP. For the composite PMI we saw big revisions in either directions, so the numbers will be more than a foregone conclusion.
In UK services PMIs due today it is hoped that we will see some pickup from recent declines, however consensus expectations are for a still-strong 58.0 print after January’s 58.3.
The Bank of Canada will almost certainly hold its 1 percent overnight rate today, with recent stronger-than-expected fourth quarter GDP numbers all but concreting the fact. However, the central bank will be less than exuberant in its accompanying monetary policy, given the broad downside risks and below trend growth still facing Canada.
Ahead of Friday’s non-farm payroll print, where consensus expectations are for a 150k print to pick up from last month’s 113k, focus will be on ADP employment change numbers, expected to print lower at 160k after last month’s 175k. In addition, expectations are for the ISM non-manufacturing index to print lower to 53.5 after 54.0 in January.