Dollar trades mildly higher today as risk markets are back on the defensive side. Yen is trading as the weakest one so far even though Nikkei is down -0.9% at the time of writing. Swiss Franc and Kiwi follows closely. Notable strength is seen in Aussie after RBA minutes showed neutral stance. Major forex pairs are crosses are generally stuck in range. Nonetheless, the dip in EUR/AUD is seen as a early sign of near term reversal and will be closely watched.
RBA cautiously neutral
RBA minutes showed that policymakers are maintaining the cautiously neutral stance. The low interest rate is helping to bring down unemployment rate and keep inflation inside target band. But it echoed recent comments from officials that "further progress on these goals was expected over the period ahead but the increase in inflation was likely to occur only gradually as the economy strengthened." The minutes also warned that "there was still a risk that growth in consumption might turn out to be weaker than forecast if household income growth were to increase by less than expected." It's generally expected that RBA will be on hold throughout 2018. But views on whether it will hike in early 2019 are divided.
BoJ to continue virtual normalization
Former BoJ board member Takahide Kiuchi said a "de-facto normalization" of monetary is already taking place with the central bank. And, the reappointment of Haruhiko Kuroda as Governor, and Executive Director Masayoshi Amamiya as the next deputy, showed the governments wants "continuity". Therefore, under the new board, BoJ will continue with such "virtual normalization". Meanwhile, Kiuchi said the reappointment of Kuroda shows Prime Minister Shinzo Abe is more focused on maintaining market stability and sustaining growth, rather than achieving the inflation target.
SPD members to vote on grand coalition
In Germany, over 450k members of the Social Democratic party will start voting on reforming the grand coalition with Chancellor Angela Merkel's Christian Democratic Union. They will have until March 2 to submit their votes. Result is expected to be announced on March 4. SPD leader Andrea Nahles said in an interview that there will be an "intense debate". She also said earlier that there is no "Plan B" if the notion is voted down by SPD members. And a new election could be the ultimate outcome should that happens. Newspaper Bild am Sonntag polled the mayors of the 35 biggest towns and cities ruled by the SPD. 26 of them said they back the notion. So far, the vote is wide open.
Elsewhere
New Zealand PPI input rose 0.9% qoq in Q4, PPI output rose 1.0% qoq. German PPI, ZEW will be the main focus in European session. Swiss will release trade balance while UK will release CBI trends total orders. Eurozone will also release consumer confidence. Canada wholesale sales will be featured.