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Global Market Update
The View from Australia

by Craig Killaby | March 29, 2021



> JP BOJ Summary of Opinions

> US FOMC Member Waller to speak


Overnight Headlines (BBG)

> The large containers ship blocking the Suez Canal has finally been dislodged, allowing for a free flow of traffic through one of the world’s most important trade paths

> Investors are starting to worry about potential contagion risk following the fallout from Archegos Capital Management’s forced selling at the end of last week, with both Nomura and Credit Suisse flagging to investors that large losses are to be expected as the fund was unable to meet margin requirements

> Brisbane has been plunged into a snap three day lockdown as a rise in COVID19 cases causes concern

What you need to know

Relatively uneventful session in terms of economic data, with the headlines the main driver of price action as local risk appetite ebbed on the news. First up was the announcement that Brisbane has been put into a three day lockdown, with border restrictions put in place as the city attempts to contain the recent uptick in community spread. The news dented sentiment as COVID19 rears it head yet again, also tough timing as the JobKeeper wage subsidy came to an end on Sunday with QLD one of the hardest hit as tourism continues to struggle. AUDUSD moved sideways for the majority of the session, with the pair getting hit on the European open following the concerning news from Archegos Capital.

Earlier in the session Nomura bank and Credit Suisse flagged potential large losses on the back of the forced close out of positions from the family office, with contagion risk very live across markets with the sheer size of the block selling. In the US, despite the vaccination rollout being well underway the country looks to be coming up with another significant wave of COVID19 infections as the variants take over. Also, financial markets will have one eye on the large infrastructure plan that President Biden will be looking to announce on Thursday AEDT, with the President’s team announcing that he will also outline how the government plans to pay the for plan with tax cuts likely on the horizon. The Dollar is up slightly in DXY terms, supported by the uptick in the UST10y yield. The AUD and crosses are largely unchanged, with AUDCNH the biggest mover up 0.5% as it becomes ever more clear that Biden’s team is not going to be soft on China as some expected. US equity markets able to edge out marginal gains, with the S&P500 up 0.1% as I write. Mixed bag in commodities with WTI crude up near 1%, while gold the laggard down 1.25%.

The Day Ahead




> NZ February Building Consents : 2.1% prev.

> EU February German Import Prices : 1.2% exp.

> US FOMC Members Quarles & Williams to speak

> US March CB Consumer Confidence : 96.9 exp.


Expecting a similar sort of session to yesterday with the economic calendar light yet again, the focus will be on the headlines and any sort of news around the US covid cases or infrastructure. Monitoring the situation in Brisbane as worries of virus spreads to other states would significantly impact the sentiment as COVID19 recovery is well underway. More details into the fallout from the Archegos story may dent the risk sentiment in Asia, with equity markets looking fragile following the news yesterday.


Range for the day : 0.7615 – 0.7660


AUD/USD Technicals


The 100DMA at 0.7624 is proving to be solid support in the near term, however rocky risk appetite sees the upside remain limited. Sustained risk aversion may see the pair target the monthly low of 0.7563, however EOM/EOQ positioning is likely to see choppy trade as rebalancing continues.

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