Market Drivers April 2, 2019
Aussie weakest post RBA meeting
Pound remains volatile inn Brexit mess
Nikkei -0.02% Dax n/a%
Oil $61/bbl
Gold $1287/oz.

Europe and Asia:
AU RBA inn hold but tilts dovish

North America:
USD Durable Goods 8:30

It was a subdued night of dealing in FX with no newsflow to move currencies much one or another, but the risk on sentiment from the start of the week was decidedly more muted as equities traded slightly lower ahead of the European open.

The Aussie was the weakest performer of the night as RBA altered its statement just a bit to alert the market that it is moving to a more dovish posture. In March the Australian central bank noted that “the Board judged that holding the stance of monetary policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time. However in April RBA stated that “the Board judged that it was appropriate to hold the stance of policy unchanged at this meeting. The Board will continue to monitor developments and set monetary policy to support sustainable growth in the economy and achieve the inflation target over time. “

Australian rates markets are now pricing in as much as 80% possibility that a rate cut will take place before the end of the year. Aussie slid almost 50 cents on the news and was trading at .7074 in early London dealing as traders are starting to position for a series of easing actions from Asian central banks.

The dollar meanwhile, held its bid as US rates climbed from their lows but were still constrained at the 2.50% level on the 10 year. Today’s calendar is barren, so price action may be slow unless equities turn volatile, however, tomorrow could prove to be a very important day data wise as both ADP employment and ISM Non-Manufacturing reports are due. Although yesterday’s ISM Manufacturing proved to be better than forecast, many analysts have pointed out that that report has consistently overestimated US growth over the past three years. ISM Non-Manufacturing gauge however could be a much read on the US economy which is driven by services.

For now the narrow ranges persist, although EURUSD looks to be increasingly vulnerable to an assault to the downside as the shorts try to break the double bottom at 1.1175, A break of that level will no doubt trigger an appetite for a run towards the key 1.1000 level, especially if US data this week convinces the market that growth is back.