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4 Feb 2015
Focus on RBNZ Governor Wheeler’s speech - Westpac
FXStreet (Bali) - The focus in the Asia session today will be RBNZ Governor Wheeler’s speech to the Canterbury Employers’ Chamber of Commerce at 00 GMT, notes Sean Callow, FX Strategist at Westpac.
Key Quotes
The focus in the Asia session today will be RBNZ Governor Wheeler’s speech to the Canterbury Employers’ Chamber of Commerce at 11am Syd/1pm local. There will be a media and analyst lock-up. Note that the RBNZ has maintained a tightening bias since July 13 and has raised rates by 100bps. Markets are pricing in rate cuts and expecting to see some significant developments today.
We will also see Aust Jan AiG performance of services index at 9:30am Syd, and China HSBC Jan services PMI at 12:45pm Syd/9:45pm local, though neither of these are market moving.
In the US, the Jan ADP employment is forecast to print at around 220k after last month’s 241k, as the robust momentum in private sector employment looks set to continue. The Westpac forecast for Jan ISM non-manufacturing is in line with consensus at 56.5, as services sector should continue to hold despite the Dec pullback. The recent run of US data has softened in recent weakness, particularly in the oil & gas and manufacturing sectors. Markets will be watching for any impact in Friday's employment report.
Markets will also be closing watching the impact of higher energy prices in Asia today too. Crude prices continued the savage bounce started earlier in the week. Two factors seem to be at work here. Firstly, US rig count is down 20% and in the midst of the most aggressive collapse since the GFC. Secondly, US steel workers announced strike action at various plants and terminals over the weekend. Now inventory numbers have not yet started to roll over, but we suspect they will do so soon. The extent to which US inventory numbers show signs of peaking in the weeks ahead will be an important driver of market expectations here.
Key Quotes
The focus in the Asia session today will be RBNZ Governor Wheeler’s speech to the Canterbury Employers’ Chamber of Commerce at 11am Syd/1pm local. There will be a media and analyst lock-up. Note that the RBNZ has maintained a tightening bias since July 13 and has raised rates by 100bps. Markets are pricing in rate cuts and expecting to see some significant developments today.
We will also see Aust Jan AiG performance of services index at 9:30am Syd, and China HSBC Jan services PMI at 12:45pm Syd/9:45pm local, though neither of these are market moving.
In the US, the Jan ADP employment is forecast to print at around 220k after last month’s 241k, as the robust momentum in private sector employment looks set to continue. The Westpac forecast for Jan ISM non-manufacturing is in line with consensus at 56.5, as services sector should continue to hold despite the Dec pullback. The recent run of US data has softened in recent weakness, particularly in the oil & gas and manufacturing sectors. Markets will be watching for any impact in Friday's employment report.
Markets will also be closing watching the impact of higher energy prices in Asia today too. Crude prices continued the savage bounce started earlier in the week. Two factors seem to be at work here. Firstly, US rig count is down 20% and in the midst of the most aggressive collapse since the GFC. Secondly, US steel workers announced strike action at various plants and terminals over the weekend. Now inventory numbers have not yet started to roll over, but we suspect they will do so soon. The extent to which US inventory numbers show signs of peaking in the weeks ahead will be an important driver of market expectations here.