Gold Posts Record Highs above $1600 on Safe Haven Buying; RBA Policy Minutes Show... |
Market volatility has slowed to a near halt ahead of the EU summit meeting event risk on Thursday. The lack of activity is being reinforced by the fact that there have no major economic headlines and very little in the way of macro data to give direction. Treasury markets have been one exception, as Spanish and Italian bond yields have seen steady rises higher.
During the Asian session, the Reserve Bank of Australia released the minutes from the July 5th monetary policy meeting, which surprised markets by removing their previously hawkish bias, instead discussing growth concerns and credit contagion possibilities. The EUR/USD ranges between 1.4080-1.4140 with the USD/JPY at 78.95-79.20. Gold has also received a lot of attention posting a record high above $1605 per ounce. The S & P 500 dropped 0.8% European stock markets fell 2% on decreases in risk sentiment. Today, macro data will come in the form of US housing figures.
The RBA policy minutes were much less optimistic than previously releases where inflation was seen as a primary focus and showed more of a neutral stance. Essentially, the suggestion was that recent economic data is showing that the RBA has some flexibility in terms of timeframes for the next move in its tightening cycle.
The bank says that it is now choosing to take a conservative stance and that the market should not assume that rate hikes are imminent.
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