Commodity prices rebounded in the US session as driven by better than expected US economic data. Moreover, sentiment was also bolstered by increased participation in the Greek PSI program. Wall Street rose with the DJIA and the S&P 500 gaining +0.61% and +0.69% respectively. In the commodity sector, the front-month contract for WTI crude oil rebounded after falling to a 3-week low of 104.35. The contract settled at 106.16, up +1.39%. Gold also rebounded after falling over the past 3 days with the benchmark contract gaining +0.71%.
The ADP reported a 216K addition in payrolls in February up from an upwardly revised 173K a month ago. The market had anticipated a modest rise of 205K. The stronger than expected addition in payrolls sent a positive signal to the employment report due on Friday. Current market expectation is that non-farm payrolls gained 201K in February, down from 243K added in the prior month. The unemployment rate probably stayed at 8.3%.
Sentiment was also boosted by the news that 58% of the investors in Greek bonds eligible for the debt swap have agreed on the 'voluntary' restructuring. Greek government spokesman Yiannis Stavropoulos stated in an interview that the information we have so far is positive'. It's likely that the thresholds will be met, and collective action clauses would not be used. The program aims to lower the Greek debts by up to 107B euro and is a precondition for the debt-ridden country to tap the new bailout fund worth 130B euro.
The RBNZ left the OCR unchanged at 2.5% but the central bank pulled back the timing for the first rate hike. Policymakers believed that the 'sustained strength' in the New Zealand dollar would reduce the need to tightening. The country's economic indicators recorded recently have been disappointing with trade deficits unexpectedly of NZD 199.2 unexpectedly recorded in January, following a surplus of NZD 305.9 in the prior month. As the Finance Minister Bill English stated, a return to surplus 'won't be easy'. Yet, 'it is one of the most important things the government can do to ensure New Zealand can withstand future shocks and build a more competitive economy based on exports and new jobs'. Three central banks, the BOC, the ECB and the BOE, will hold meetings for monetary decisions later today.