AUD: AUDUSD Bounces As Equities Rally
Mar-26 01:54
AUDUSD’s reaction to the lower-than-expected February CPI print was very brief and the pair has been driven by US dollar moves since. It fell to 0.6278 as the greenback rallied and then turned higher with stronger risk appetite and is now down slightly to 0.6301 today. It appears to be finding support from stronger domestic and HK equities. The USD index is slightly higher and off today’s peak.
- Given headline CPI continues to be impacted by various state and federal electricity rebates, the focus is on the underlying trimmed mean which moderated 0.1pp to 2.7% y/y in February, third straight month under 3%. February services inflation also suggests it moderated in Q1.
- AUDNZD tested 1.1000 again but couldn’t hold the move and the pair is now down 0.1% to 1.0986. Aussie is also 0.1% lower against the euro and pound at 0.5835 and 0.4867 respectively.
- AUDJPY fell to 94.26 but has bounced back to be slightly higher today at 94.54, close to the intraday high at 94.64.
- Equities are rallying with the ASX up 0.8%, Hang Seng +0.7% and S&P e-mini +0.1%. Oil prices are moderately higher again with WTI +0.5% to $69.37/bbl. Copper is up 1.7% and iron ore continues to trade around $102/t.
- Later the Fed’s Kashkari and Musalem appear and preliminary US February durable goods data print. The ECB’s Cipollone participates in a panel and UK February CPI and the government budget are released.
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GERMANY: Official Interim Election Results Tilt Towards Missing BSW & FDP
Feb-24 01:50
Official interim results on the German parliamentary election closely tilt towards the possibility of a two-party coalition of Union (CDU/CSU) and SPD, as they see both FDP and BSW to not secure enough votes for parliamentary representation.
- Results are as follows: CDU/CSU 28.6%, AfD 20.8%, SPD 16.4%, Greens 11.6%, Left 8.8%, BSW 4.972%, FDP 4.3%.
- Even though the BSW's gap to 5% is very narrow, chances of the final results tilting in favour of them appear rather low at this stage.
- This would make possible a two-party "grand coalition" of union (CDU/CSU) and SPD, which would be associated with bringing higher stabiltiy in government compared to a three-party outcome.
- For a 2/3rds qualified majority for potential debt brake reform, 420 out of the likely 630 Bundestag seats would be required - and the ~414 seats of the 'core' parties represented (CDU/CSU, SPD, and Greens) would fall short of that. Thus, approval from the Left will be needed, who are in favour of debt brake reform in theory but might push for concessions from the government, complicating negotiations.
- Detailed results here: https://www.bundeswahlleiterin.de/bundestagswahlen/2025/ergebnisse/bund-99.html
CHINA: Central Bank Injects Liquidity via OMO.
Feb-24 01:30
- The PBOC issued CNY292.5bn of 7-day reverse repo at 1.5% during this morning’s operations
- Maturities today CNY190.5bn
- Net liquidity injection CNY102bn.
- The PBOC monitors and maintains liquidity in the interbank system through the issuance of reverse repo.
- The CFETS Pledged Repo Deposit Institutions 7 Day Weighted Average is at 1.7154% down from Friday at 2.2156%.
- The China Overnight Interbank Repo Rate is at 1.83% (from Friday at 1.54%).
- The China 7-day Interbank Repo Rate is at 2.20% (from Friday at 1.75%)
MNI: CHINA PBOC CONDUCTS CNY292.5 BLN VIA 7-DAY REVERSE REPO MON
Feb-24 01:22
- CHINA PBOC CONDUCTS CNY292.5 BLN VIA 7-DAY REVERSE REPO MON
