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BHP in focus ahead of earnings

Four markets in focus today: AUD/USD, EUR/GBP, Australia 200 cash and BHP Billiton.

AUD/USD

As you would expect the pair traded in a narrow range in US trade given the Presidents Day holiday. At 11:30 AEDT today traders will focus on the RBA minutes, especially given the change of stance from the bank to a more neutral view. The key move from the RBA was to drop concern about the high Australian dollar, so views around the currency will remain front and centre. Traders will also be looking for any clues as to what triggers would need to be seen for re-adopting the easing bias. Given the current price action, moves to 0.9079 look like selling opportunities.

EUR/GBP

I suggested selling the pair last week at 0.8240; however the pair hasn’t reached my limit. I would cancel this recommendation and wait to see how things materialise from here; especially given the ten-day RSI has printed a higher high, while price has printed a higher low. This could indicate a reversal; however both the current fundamental and technical picture still suggests selling on rallies. The pair will be in play today with Eurozone current account at 20:00 AEDT, UK CPI (expecting no change at 2%) at 20:30 AEDT and the ZEW business survey.

Australia 200 cash

I highlighted this market as my ‘one to watch’ yesterday and suggested buying the index on a slight dip to 5370. The pair actually hit a low of 5265 so the position has swung into the money, with a good rally going into European trade. Earnings ramp up today and on the docket we have AIO, AMC, SVW, CCL, MND, ARI, SHL, MSB and BHP.

BHP Billiton (BHP)

BHP report pre-market and analysts expect NPAT of $6.9 billion (range $6.6 billion to $7.02 billion), with sales of $34.1 billion. The interim dividend is expected to be 60c. Interestingly NPAT profit has missed estimates for the past five semi-annual periods on Bloomberg data. Watch out for costs cuts and potentially lower future capex spend. BHP is currently trading right in the key zone, having found good sellers between A$38.20 to A$38.40 since October.

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