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Global Market Update
The View from Australia

Craig Killaby April 15, 2019

Data/Speakers

 

> US Empire State Manufacturing Index : 10.1 v. 8.1 exp.

 

Overnight Headlines (BBG)

 

>  China is considering a U.S. request to shift some tariffs on key agricultural goods to other products so the Trump

administration can sell any eventual trade deal as a win for farmers ahead of the 2020 election, people familiar with the

situation said

>  U.S. Attorney General William Barr is expected to send Special Counsel Robert Mueller’s report to Congress and make it public on Thursday morning (EST)

 

What you need to know

 

Not very much to touch on from the 24 hours of trade with the AUDUSD trading in a tight range, while the Dollar was edge out some very tight gains. No real data on the docket caused a very lacklustre session in APAC, as the Aussie was unable to push above the 0.7180 level. Overnight in Europe, the thin trading continued and with no developments from the Brexit fiasco the price action in FX markets was uneventful. EURUSD was able to push higher, touching a session high of 1.1321 before trailing off. GBPUSD was one of the better performers of the session, up 0.15% against the Buck. In the US, the Loonie came under pressure after the Bank of Canada’s business outlook indicator turned negative and WTI crude’s rally eased. US equity markets had a sluggish start to the week, weighed down by poor performance from some major banks with Goldman Sachs and Citi providing the market with some poor results. The S&P500 finished down 0.9%. UST yields falling on the far end of the curve, with the 10y down 1.1bp. It was a relatively quiet session even in commodity markets, with base metals little changed and Gold down 0.25%.

 

The Day Ahead

 

Data

 

> US FOMC Member Rosengren to speak

> AU RBA Monetary Policy Meeting Minutes

> UK March Claimant Count Change & Average Earnings Index : 17.3K & 3.5% exp.

> EU April German ZEW Economic Sentiment : 0.9 exp.

> US March Industrial Production : 0.2% exp.

 

A bit more action today in APAC with the release of the meeting minutes from April’s meeting, and after Debelle’s comments sparked a positive reaction from the AUD it is tough to see the doves being pleased with the insights coming out of these minutes. Debelle’s comments showed that there is significant reluctance from the RBA to move rates, and the data dependency of the central bank will likely be highlighted. Overnight, it will be UK employment data and some US industrial production figures as the main data risks.

 

Range for the day : 0.7150 – 0.7195

 

AUD/USD Technicals

Tight 20 pip range for the pair yesterday as the 200SMA, which now sits at 0.7192 continues to hold strong. A break of the 200SMA will be needed for the AUDUSD to make an attempt to break higher, where the February high of 0.7207 awaits. On the downside, there is not very much holding up the pair above 0.7118 and a break lower leaves the pair vulnerable to the recent lows of 0.7027 and even further 0.7003.

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