Due to the US holiday, trading has been subdued. Gold continues to push higher, while equity markets struggle. The Usd gained broadly and was helped by a thin liquid environment, which caused EURUSD stops to be triggered in the Asian session. The break of 1.2707 gives scope to test December’s 1.2550 lows. We still believe the risk aversion trade is well entrenched and should benefit safe-haven currencies, such as USD and JPY specifically. Gold continues to gain ground alongside US inflation expectations, which suggests that investors are becoming increasingly concerned with the Fed unorthodox monetary policy. In addition, recent comments from the Russian Central Bank, on its goal to increase their physical gold reserves, should keep prices well supported today. In Australia, the RBA released the February Board Meeting Minutes, when the central bank opted to slash 100bp from their cash rate to 3.25%. The minutes noted that marked deterioration in global economic conditions and downgrades to the domestic growth and inflation outlook caused the central bank to take a more aggressive stance. One area of note was the bank’s assessment that growth remains considerably more robust domestically, than in other developed countries. The AUDUSD fell through the 0.6432 horizontal support and continues to have a bearish tone. US President Obama first fiscal stimulus (we believe more is to come) is expected to be signed into law by the President today. However, this plan is nowhere near as inspiring as the headlines might suggest. In the European session, markets will be watching German ZEW investor sentiment.

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