Price action this morning remained in risk-off mode as Asian markets remained under pressure following the release of Chinese services figures which came in under forecasts, however remained barely in expansionary territory. In addition, the PBOC continued to weaken the CNY, causing the reference rate to fall to its lowest level since April of 2011. This caused AUDUSD to plummet, temporarily falling below 0.71 which is also a two week low. Safe haven plays such as gold continued to rise for their third consecutive day, along with the Yen, as news releases claimed that North Korea successfully completed a test of a hydrogen nuclear bomb this morning. Meanwhile, yesterday’s dairy auction, which retreated back into deflationary territory at -1.6%, smashed NZDUSD below 0.665, which is a three week low. Europe is scheduled to release service PMI figures today, which should continue to paint an optimistic future for the bloc’s recovery. Elsewhere, the UK will similarly publish services figures, which continue to remain solid. Today’s ADP employment report from the US will take centre stage, in anticipation to Friday’s main NFP data. The headline figure is projected to fall slightly from December’s 217K to 193K, though this would remain in-line with economists’ view that the US economy continues to create solid job gains. Lastly, this evening will see the FED release FOMC meeting minutes from December’s meeting, where the decision to raise interest rates was unanimous. |
