At its meeting today, the Reserve Bank of Australia (RBA) decided to keep the official cash rate unchanged at 0.10% and has expanded its quantitative easing program by purchasing an additional $100 billion of bonds. "The board will not increase the cash rate until actual inflation is sustainably within the 2 to 3% target range,” RBA said.
"The current monetary policy settings are continuing to help the economy by lowering financing costs for borrowers, contributing to a lower exchange rate than otherwise, supporting the supply of credit needed for the recovery and supporting household and business balance sheets." RBA governor Philip Lowe said.
US futures and European stocks extend higher on Tuesday following the positive comments from US president Joe Biden. Biden attended a two-hour meeting with Republican senators on Monday. The president said he does not want a smaller stimulus package.
On the US earnings front, Pfizer (NYSE: PFE) and Exxon Mobil (NYSE: XOM) reporting earnings today before the bell while Amazon (NASDAQ: AMZN), Alphabet (NASDAQ: GOOGL) and Electronic Arts (NASDAQ: EA) is scheduled to report results after the market close.
Crude oil price climbed to fresh month high on Tuesday after OPEC+ appeared to hold firm to promised output cuts. On the other hand, Russia reportedly plans to cut its crude exports by almost 20% to a three-month low in February.
In the currency market, the Australian dollar trading extra volatile after the first RBA board meeting of the year. Meanwhile, the New Zealand dollar and Canadian dollar trading steady supported by the strong crude oil prices.
The gold price trading under pressure on Tuesday after the US dollar hits 6-week high. Overall, the momentum remains bearish throughout the European session.
On the data front, the annual house price growth in the UK slowed modestly to 6.4% in January, following the 7.1% jump in December.
On Monday, the Institute for Supply Management released the latest ISM PMI data. The PMI came in at 58.7, which was 1.8% below December’s 60.5.
Worldwide, the number of COVID-19 cases reported is more than 103.2 million and more than 2.2 million have died. The United States has confirmed over 26.2 million cases and has had more than 441,000 deaths from COVID-19, the highest totals in the world. On the positive side, "It shows this virus can be controlled, even with the new variants in circulation." WHO Chief Tedros Adhanom Ghebreyesus said on Monday.
EUR/USD: The currency pair continuously trading weaker against the dollar. At the time of writing, the pair slightly rebounded from the early session lows.
The important levels to watch for today: Support- 1.2030 and 1.2000 Resistance- 1.2100 and 1.2130.
GOLD: The precious metal retreated back to below $1850 after the metal failed break above $1875 during the previous session.
The important levels to watch for today: Support- 1840 and 1836 Resistance- 1856 and 1862.
Quote of the day: Investing isn’t about beating others at their game. It’s about controlling yourself at your own game – Benjamin Graham.