It has been another jittery session for financial markets, with news that OPEC is planning to slash production in the face of collapsing crude oil prices not doing much for market nerves.
Chinese equities closed strongly higher today, with the CSI 300 rallying 2.2% to a 2-year high, and the S&P 500 rebounded 4.2% yesterday. But at time of writing it’s down 2.3%, replicating price action on Monday and Tuesday when equities closed respectively 4.6% higher and 2.8% lower.
FX markets have also been choppy. Sterling has extended its gains versus the Dollar to trade above 1.29, with markets seemingly reacting positively to incoming Bank of England Governor Bayley’s suggestion that a policy rate cut may not be required at this stage. The GBP/EUR cross however has remained broadly range-bound around 1.155. All eyes are now on Bank of England Governor Carney’s scheduled speech at 17.00 London time.
The Australian Dollar benefited early in the session from decent trade data for January. The AUD 5.2bn goods and services trade surplus and 2.8% mom contraction in imports and exports suggest that the wild bushfires and coronavirus did not have a significantly negative impact on Australian external trade early in the year. However, the AUD/USD cross has faded throughout the session and is currently back below 0.66. The NZD/USD cross has had a similar trajectory and is currently trading near 0.63.
