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Decent SONIA Action Tuesday

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A fairly quiet session so far in Asia, with market participants awaiting the key RBA rate announcement later in the session. In the US COVID-19 relief talks continue to drag on. Republican Senator Collins was on the wires saying no deal has been reached, but there will be a follow up. The progress on the deal seems to have taken some of the wind out of the greenbacks sails.

  • AUD is top of the G10 pile ahead of the RBA release, last up 12 pips at 0.7633. Earlier in the session ANZ Roy Morgan Weekly Consumer Confidence was released, at 112.1 the print rose from 111.2 previously. The survey showed optimism increased about economic conditions in the next 12 months and the next 5 years.
  • NZD/USD has come off session highs, last at 0.7157 flat on the session.
  • USD/JPY is down around 6 pips at 104.86 as the greenback oscillates. Chatter surrounding a seemingly looming extension of Japan's state of emergency continues to draw attention, with Kyodo News citing an unnamed official as noting that PM Suga extend the state of emergency through Mar 7, with the formal decision coming up today. The official suggested that the Tochigi prefecture would be removed from the list of regions covered by the emergency declaration.
  • The PBOC injected CNY 78bn via OMO's, the third consecutive session of net injections after repo rates spiked to multi year highs. The bank fixed USD/CNY at 6.4736, another fix above sellside estimates, bringing total misses in Feb to +33 pips (Jan +284 pips, Dec +133 pips)
  • Elsewhere GBP and EUR are both slightly firmer, both pairs were near session lows as US trade came to a close.
  • A thin economic docket for Europe and the US, the key release is French HICP.