The Market has shrugged off any fears of Trade Wars arising from the proposals that were released by the White House last week, with the consensus that they are being used as a threat to force trading partners to accept the demands of the US and strengthen its hand at the negotiating table. However, this could be a dangerous belief if it looks like the tariffs will be implemented and the market panics. President Trump is meeting with Industry representatives today, amid growing opposition from the international community. The Reserve Bank of Australia has left Interest Rates on hold at 1.5% this morning. The Rate Statement mentioned that inflation was likely to remain low for some time. The risks are that household consumption remains a source of uncertainty and the appreciating exchange rate could slow economic activity and inflation. Markets had a mixed reaction, with AUDUSD first moving higher from 0.77777 to 0.77920 before reversing the move and dropping to 0.77684, suggesting that the outcome of the event was priced-in to a large extent. Retail Sales s.a. (MoM) (Jan) came in at 0.1% v an expected 0.4%, against -0.5% prior. AUDUSD initially moved higher on this data release from 0.77693 to 0.77845 before partially reversing to 0.77667 and settling around 0.77835 ahead of the Rate Decision. Spanish Markit Services PMI (Feb) was 57.3 v an expected 56.4, from 56.9 previously. This was a welcome increase which beat market expectations. German Markit Services PMI (Feb) came in as expected, unchanged at 55. Markit PMI Composite (Feb) was 57.6 v an expected 57.4, from 57.4 previously. EURUSD moved lower to find support at 1.27687 following this data release. This data was largely in line with expectations. Eurozone Markit Services PMI (Feb) was 56.2 v an expected 56.7, from 56.7 previously. Markit PMI Composite (Feb) was 57.1 v an expected 57.5, from 57.5 previously. EURUSD moved high to settle around 1.23225 following this data. The Services PMI number released last month was the highest level reached since September 2007, which indicates the strong performance of the Eurozone economy’s services sector. US Markit Services PMI (Feb) was 55.9 v an expected 54.6, from 55.9 previously. Markit PMI Composite (Feb) was 55.8 v an expected 55.5, from 55.9 previously. USDJPY moved lower from 105.895 to a low of 105.710 with the release of this data. This release provided a slight downward move as the data beat expectations, and, ultimately, could indicate an increase in inflation, which has prompted dollar weakness and equity market selling recently. US ISM Non-Manufacturing PMI (Feb) was released at 59.5 v a consensus of 59.0 expected, against a prior reading of 59.9. UK BRC Like-For-Like Retail Sales (YoY) (Feb) was 0.6% against an expected 0.4%, from 0.6% previously. The release, which was above expectations, saw GBPUSD move higher from 1.38303 to a high of 1.38470. This data point charts the change in the value of same-store sales. EURUSD is unchanged overnight, trading around 1.23390. USDJPY is largely unchanged in early session …
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