US equity markets edged higher despite a run of disappointing economic data overnight. The Nasdaq hit a 15-month high, rising 0.8% for the session. The Dow and S&P500 were also higher.
US treasuries weakened (yields rose), as stronger risk appetite dampened demand for government bonds.
In Australia, yields on bond futures fell, but then lifted to be little changed. Yields on 3-year bond futures were at 1.80%, while yields on 10-year bond futures were at 2.46%.
The US dollar index rose slightly, and hit its highest in 11 years.
The Australian dollar weakened ahead of the RBA board meeting today. Markets are pricing in a near 60% chance that the RBA will cut the cash rate by 25 basis points.
We expect that it will leave rates unchanged, but recognize that a decision to cut today is possible. Either decision will likely see a reaction in the AUD.
Oil prices slipped in the US and the Brent benchmark fell sharply on speculation that a nuclear deal would lift sanctions on Iran. Gold prices fell, in step with a stronger US dollar.
Australia-wide dwelling prices jumped a further 0.3% in February following a 1.3% surge in January, according to Corelogic RP Data.
Prices have now risen in ten of the past twelve months and are at an all-time high.
Over the year to February, dwelling prices rose in all capital cities. Sydney was by far the strongest market over the past twelve months with prices rising 13.7%. They were up 7.4% in Melbourne, 5.9% in Brisbane, 3.4% in
Adelaide, 1.8% in Canberra, 1.6% in Darwin, 0.7% in Hobart and 0.5% in Perth.
Gross company operating profits fell 0.2% in the December quarter, the third consecutive quarterly decline. For the year to the December, company profits fell 5.9%. Mining profits fell 19.3% in the year to the December.
The AiG Performance of Manufacturing index fell from 40.0 in January to 45.4 in February.
The TD Securities - Melbourne Institute measure of monthly inflation was flat in February to be up 1.3% over the year.
The unemployment rate in the euro zone unexpectedly fell from a revised 11.3% to 11.2% in January. Although it remains elevated, it was the lowest since April 2012.
Headline CPI rose from -0.6% in the year to January to -0.3% in February, slightly above the median estimate of -0.4%, but still in contraction. The core rate of annual inflation was unchanged at 0.6%.
Capital spending stepped down from an annual pace of 5.5% in the September quarter to 2.8% in the December quarter.
House prices in the UK fell 0.1% in February, the first fall in five months, according to Nationwide. Nonetheless, low interest rates and the improving labour market are expected to support the housing market.
The manufacturing PMI rose from a revised 53.1 in January to 54.1 in February, the highest in seven months.
Consumer spending fell 0.2% in January, the second consecutive monthly fall (consensus -0.1%).
After adjusting for inflation, consumer spending rose 0.3% reflecting the impact of lower gas prices. Incomes grew at 0.3% in January, also a touch below expectations of 0.4%.
In other data, the ISM manufacturing index slipped from 53.5 in January to 52.9 in February.
January's reading was the lowest in a year, and suggests manufacturing activity softened.
In contrast, the manufacturing PMI published by Markit, a relatively newer survey, rose from 53.9 in January to 55.1 in February, but down from its recent high around mid-2014.
Construction spending fell 1.1% in January, also disappointing expectations of 0.3%.
At the end of January, a Bloomberg measure of consumer comfort rose to its highest level since July 2007.