AUD

The G20 meeting in Mexico did little to quell global markets overnight as very little was achieved leading the slide of risk assets through the early part of trade.  The Finance ministers failed to agree on any increase to the IMF contribution to the Euro zone debt fund.   Although Germany did bear some of the blame for the lack of agreement they did manage to convincingly pass the second EU/IMF bailout of Greece by 496 to 90 votes.  This however did not spur confidence with European stocks dragged down, and demand for the US dollar increased with the Australian dollar trading back to 1.065 and the Euro slipping down to 1.3366 at the start of the US session. 
 
With confidence low a surprise print on pending how sales turned the US session on its head.  The S&P was down over 100 points at the start of the US session, but rebounded as monthly pending homes sales came in at 2% nearly double what was expected.   The S&P finished up 0.14%, and as a result the US dollar was sold off with the Australian dollar following equities as it peaked at 1.07820 USD a few hours ago.   There weren’t any other key economic news out overnight which extenuated the bounce from the G20 through to the pending home sales. 

After a solid run for the month of February the Yen depreciation march halted overnight as it retreated from it 8 month highs.  The price of oil is getting the blame for this demand for the Yen as WTI futures price of 107.81 worrying the ability for the US economic recovery and seeing bullish bets on its recovery possibly being unwound.   We do have Japanese retail sales data out from January this morning with a 0.2% contraction expected. 

Today’s local session does not have any economic data of note and the US equity session saw profit taking occur as it wound up which has given the local session little to open on.  The Australian dollar is 25 pips off its the high following the late paring of gains and we don’t expect too much volatility unless Japanese retail sales data is well away from median estimations.  At the time of writing the Australian dollar is buying 1.0749 USD.