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Global Market Update
The View from Australia

by Craig Killaby | March 24, 2021



> NZ February Trade Balance : 181M v. 180M exp.

> AU March Flash Manufacturing & Services PMI : 57.0 & 56.2 v. 56.9 & 53.4 prev.

> AU February Goods Trade Balance : 8.10Bio v. 8.75Bio prev.

> EU March Flash Manufacturing & Services PMI : 62.4 & 48.8 v. 57.5 & 46.1 exp.

> UK March Flash Manufacturing & Services PMI : 57.9 & 56.8 v. 55.0 & 51.1 exp.

> US February Core Durable Goods Orders & Durable Goods Orders : -0.9% & -1.1% v. 0.6% & 0.7% exp.

> US March Flash Manufacturing & Services PMI : 59.0 & 60.0 v. 59.6 & 60.1 exp.

> US EIA Crude Oil Inventories : 1.9M v. 1.4M exp.


Overnight Headlines (BBG)

> A large cargo ship in the Suez Canal has been blocking traffic as they rush to get one of the world’s busiest waterways back into operation

> The situation in Europe continues to weigh heavy on risk appetite, with the UK eluding to border restrictions in an effort to stop the spread of the virus variants

What you need to know

Interesting price action across markets yesterday, as the concerns regarding the re-opening of the global economy continued to weigh on risk appetite, while commodities performed well on the session. The AUDUSD has had a strong move lower this week, touching a fresh low of 0.7583 as the European volume came in, as investors seek refuge into the haven currency pairs. NZDUSD really has been the leader in the FX space in term of risk aversion signals, with the local real estate restrictions pushing down the Kiwi. Seems to be a situation in the Suez Canal with a large cargo ship still blocking the very important waterway, blocking the supply of goods and seeing commodity prices perform well overnight.

The Buck is getting support from both haven flows and commentary from the Chair of the Fed about a stronger than forecast labour markets, with the DXY up 0.25% on the session. AUD crosses mostly lower, as the Aussie continues to struggle against the Greenback. US equity markets limping to the close today, with the S&P500 down 0.3% as investors weigh up the COVID19 risks in the near term. While locally Asian equity markets saw a sea of red, as commentary from the US/China relations and the potential delisting of Chinese companies in US weighing on markets. Commodities reversed much of the losses seen yesterday, with WTI crude up 5.5% while Gold is up 0.4% on the haven flows.

The Day Ahead




> JP BOJ Gov. Kuroda to speak

> CA BOC Gov. Macklem to speak

> EU ECB President Lagarde to speak

> UK BOE Gov. Bailey to speak

> US FOMC Members Williams, Clarida, Evans, and Bostic to speak

> US Q4 Final GDP : 4.1% exp.

> US Unemployment Claims : 727K exp.


With the Aussie opening up below the 0.7600 handle it will be interesting to see whether or not the momentum continues to build lower. Personally find it interesting that this strong move has been started by the NZ policies and the German lockdown, maybe signalling that this may be a brief head fake lower. EOM/EOQ position may also be a factor, so keeping an eye on flows. US unemployment claims and GDP numbers will be the US data highlights, with a raft of speeches from global central bankers will provide macro investors something to chew on.


Range for the day : 0.7560 – 0.7635


AUD/USD Technicals


Some pretty key levels need to hold today to signal that that a rebound may be on the cards, if the pair’s slide continues then it might be a swift move lower towards 0.7400. 0.7580 is first up, and with the pair a few ticks above in early trade it seems like more downside is coming. Resistance at the 50DMA at 0.7613, while the intraday low looks unlikely to hold.

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