Gulf Coalition Airstrikes Shift to Ground Action

While the Saudis have announced an end the air campaign aimed at eliminating the threat of heavy weaponry in neighboring Yemen, the nation is preparing for a ground invasion to restore the government. Operation “New Hope” is set to begin imminently with Saudi King Salman primed to send in the National Guard. Coupled with the latest American Petroleum Institute Crude Stocks figure, oil prices fell on the Saudi declaration. API beat expectations by a wide margin, more than doubling expectations of a 2.600 million barrel build, printing at 5.500 million barrels. This marks 15-straight weeks of growth as EIA data due later today should confirm that US inventory growth rebounded after last week’s more moderated increase in stockpiles. West Texas Intermediate crude oil prices slipped below $56 per barrel this morning in heavy trading.

In his latest comments, Reserve Bank of Australia Governor Stevens has telegraphed to markets his intention to continue cutting rates. After spending months talking the Australian dollar lower, his latest remarks are aimed at providing guidance on the outlook as he seeks to strike a balance between a burgeoning housing bubble and a slowdown in the critical mining sector. Inflation data released overnight confirmed that the economy is in the midst of a slowdown with annualized CPI falling to 1.30% from the prior figure of 1.70%. Although not critical like the experience in both the United States and Europe, further accommodation from the RBA might be an imperative to sustain growth considering the global economic backdrop. The AUDUSD pair rose over 45 pips on the announcement, continuing to trend higher as the US dollar retreats against peers.