- Asian equities are seen lower with the Nikkei 225 (-1.1%) the laggard after tripping stops through 22,000 to the downside
- Reports suggest the UK could be willing to withhold their Brexit settlement bill. Netherlands prepares for a hard Brexit
- Looking ahead, highlights include German ZEW, German and US supply
Equity markets are somewhat fragile, with major Asian bourses off to a weaker start. US markets were closed for President’s day and as such, Asian participants took the cue from European equities which slipped in yesterday’s session. In Australia, the ASX 200 (-0.4%) has come under pressure from material and financial names, with many of the large banks reversing the prior days gains. Over in Japan, the Nikkei (-1.3%) had tripped through 22,000 amid softness in tech names. The Hang Seng (-0.3%) reopened for the first time since last week, however initial gains had been short-lived, with the index conforming to the sombre tone.
JGBs are flat in thin-trade, March futures contract down 2 ticks and hovering near yesterday’s levels. USTs off by 6+ ticks with yields continuing to pick up, 2yr yields now at the highest since Sep’08 after hitting 2.22%, while the US curve is also flattening this morning.
Spain’s Economy Minister de Guindos was confirmed as the nominee by the Eurogroup for the ECB Vice-President role. (Newswires)
ECB’s Hansson (hawk) says he’s not interested in becoming ECB President. (Newswires)
The UK is said to have a secret plan to withhold Brexit payments if the EU refuses to provide the UK with a desirable trade deal. (Newswires) Elsewhere, according to a letter seen last week, Netherlands government has linked its decision to activate hard Brexit plan amid a lack of clarity from the UK. (Sky)
The RBA meeting minutes failed to provide any fireworks with the central bank sticking with its neutral tone. As such, AUD had been largely unmoved post the release of the minutes and instead focus will fall on the wage price index due out tomorrow. AUD briefly dipped below 0.79 amid the push higher in the USD index, while AUD/NZD ran into resistance at 1.0750. Elsewhere, a leg lower in equity markets, provided support for the JPY with major cross falling to intra-day lows, with the exception of the USD/JPY which has benefited from some short-covering. NZD will be in focus later today with participants awaiting the latest Fonterra GDT auction. According to CBA, WMP futures are suggesting that prices will be flat.
In the EM space, PHP had outperformed against the greenback after comments from the Philippine Central Bank chief, who stated that the BSP will not hesitate to raise rates if inflation risks persist. KRW fell amid rising fears of American protectionist policy’s (namely proposal to impose hefty steel tariffs), which has prompted South Korea to threaten that a retaliation is possible.
RBA February minutes states that low rates are helping reduce unemployment and lift inflation, additionally rising AUD would impede pick up in economic growth and inflation, however AUD TWI is still within narrow range of past couple of years. (Newswires)
Brent and WTI crude futures traded with modest gains overnight, however did pull off best levels amid the slip in risk sentiment. Declines in WTI came to a halt after meeting support at USD 62.00/bbl. Precious metals are slightly softer as USD consolidates above 89.00.
Libya’s NOC says budget delays may negatively impact oil production. (Newswires)
US markets were closed for a public holiday.