RBA keeps interest rates unchanged

•     RBA keeps interest rates unchanged

•      The Reserve Bank of Australia left the key interest rate on hold at 2.25%, despite expectations of a back-to-back rate cut.

•      Gov. Glenn Stevens reiterated that AUD remains above most estimates of its fundamental value

•      The strong growth of lending in the housing market is likely the main reason the Bank left rates steady

•      AUD/USD firmed up nearly 0.90% following the decision to touch our resistance line of 0.7840, a clear break of that hurdle could target our next resistance zone of 0.7900.

•      Gov. Stevens did say that “further easing of policy may be appropriate over the period ahead,” thus we maintain our medium-term view that the pair is likely to challenge the 0.7500 territory in the future.

•     Japanese wages rise

•      Japan’s regular base pay rose 0.8% yoy in January, the biggest gain since 2000. Good, no? No! After inflation, wages fell 1.5% yoy.

•      That’s likely to mean the administration depends even more on a weak yen policy going forward.

•     Today:

•      Germany: Retail sales for January.

•      UK: Construction PMI for January As with the manufacturing PMI released on Monday, a positive surprise could keep GBP supported.

•      Canada: Monthly GDP for December and GDP for Q4. Weak GDP=CAD-negative.

•      Speakers: Riksbank Governor Stefan Ingves and BoE Governor Mark Carney