Euro weakened mildly as the talk between Greece and Eurozone finance ministers over the new bailout arrangement broke down abruptly yesterday. Greece rejected a proposal from European commission to extend the international bailout package by six-months. The chairman of the Eurozone finance ministers meeting, Dutch finance minister Jeroen Dijsselbloem said Greece had until Friday to request for an extension or the EUR 240b bailout program will expire on February 28. Also, ECB is set to decide on Wednesday whether to maintain the emergency lending to Greek banks. While the common currency weakened mildly, it's still staying above 1.1261 minor support against dollar and maintains a neutral bias.
RBA said in the minutes of February meeting that deteriorating economic outlook triggered the latest interest rate cut to new historical low of 2.25%. It noted that "there was considerable uncertainty around the timing and extent of the expected increase in household consumption growth and non-mining business investment." Also, "the outlook for the Chinese property market and its implications for Chinese demand for commodities" were uncertain. Nonetheless, the minutes also noted that "an improvement in the appetite for businesses to take on risk had the potential, should it occur, to lead to much stronger growth in non-mining business investment than currently forecast." Overall, some economists noted that the decision for February's cut was probably a marginal one.
Looking ahead, European data will be the major focus today. UK will release CPI and CPI. German and Eurozone ZEW economic sentiment are expected to show improvements in February. US will release empire stat manufacturing index and NAHB housing market index. Canada will release international securities transactions.