Morning Commentary: No Man’s Land Once Again

A daily summary and commentary of events and factors that affect the global markets, with a particular emphasis on the foreign exchange markets.

No Man’s Land Once Again Share this story: Alan Rose Foreign Exchange Senior Trader

As we arrive this morning, respective equity, interest rate, commodity, and foreign exchange rates have become increasingly less correlated despite the upbeat news on U.S.-China trade talks and Brexit. Both bulls and bears can make strong cases for their respective causes, but the disputed land that lies between them both remains a mine field of random price action, whipsaw price reversals, and quick and sharp reversals of fortune within a broad consolidative pattern. It is not a place for the faint of heart and one needs a strong backbone and deep pockets or should move to the sidelines and wait for the dust to clear.   Asian equities were mixed, European equities are in the red, and U.S. equities were forecast to open fractionally higher but are opening lower. G7 interest rates are higher (exception of Australia) along with commodity prices; the U.S. dollar is higher for the fifth day in a row after falling in seven of the previous nine sessions. We appear to have entered a time frame where most of the good news has been priced in as investors await the conclusion of the U.S.-China trade talks and an important week of U.K. Parliamentary votes coming up on March 12, 13, and 14.   The ECB has its monetary policy meeting this Thursday and the U.S. jobs report comes out on Friday. Perhaps these two events might move the needle slightly, but it would appear we will remain in the Gulag for the time being until such time that a clearer case can be made for either a more bullish or bearish environment. HERE ARE THE KEY NEWS STORIES FROM OVERNIGHT: The Reserve Bank of Australia (RBA) kept interest rate unchanged at 1.50% as expected. The last move by the RBA was to lower interest rates from 1.75% to 1.50% on August 3, 2016. The RBA continues to reinforce a dovish message about the Aussie economy and Aussie interest rates are lower again on the session with the Aussie dollar remaining weak and vulnerable for now. China lowered its official growth rate for this year to 6.0%-6.5% from “about” 6.5% last year. Weaker exports, investments and consumption are all combining to slow the economy in conjunction with rising debt levels. The Chinese economy GDP peaked in 2008 at nearly 14% GDP and has been gradually declining since then, back to the levels prior to joining the WTO in 2001. The Chinese yuan is unchanged on the session.

If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos!

Follow City National Bank on social media:

Investment and Insurance Products: • Are Not insured by the FDIC or any other federal government agency • Are Not deposits of or guaranteed by a Bank or any Bank Affiliate • May Lose Value This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. The Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting.

Unsubscribe from this list  |  Update email preferences This message has been sent to bank@banking.offers.report. Please do not reply to this email. To ensure the delivery of future emails, please add foreignexchange@emails.cnb.com to your email address book or safe sender list. Copyright ©2019 City National Bank – All Rights Reserved. 350 South Grand Avenue, 12th Floor, Los Angeles, CA 90071 City National Bank is a subsidiary of Royal Bank of Canada. TERMS & CONDITIONS  |  PRIVACY STATEMENT NMLSR ID# 536994 | City National Bank Member FDIC