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Global Market Update
The View from Australia

by Craig Killaby | April 18, 2021



> CN Q1 GDP : 18.3% v. 18.3% exp.

> CN March Fixed Asset Investment & Industrial Production : 25.6% & 14.1% v. 27.0% & 18.3% exp.

> CN March Retail Sales & Unemployment rate : 34.2% & 5.2% v. 28.0% & 5.4% exp.

> EU March Final H/line CPI & Final Core CPI : 1.3% & 0.9% v. 1.3% & 1.3% exp.

> US April Prelim UoM Consumer Sentiment & Prelim UoM Inflation Expectations : 86.5 & 3.7% v. 88.9 exp.  & 3.1% prev.


Weekend Headlines (BBG)

> The US Treasury Currency report named no nations as a currency manipulator, a sign from the new administration that they will have a higher threshold than the previous

> Europe is ramping up their vaccination effort, as countries in the Bloc look ahead to more fiscal support to aide in the recovery

> China’s PBOC confirmed that their moves to digitize the Yuan is in order to boost domestic demand not to compete with the Dollar

What you need to know

The week saw a steady move higher in the Aussie, as risk appetite went to the upside as yields retreated to the lowest levels in months and support for the Dollar waned. The Chinese data dump Friday showed that the recovery is well on track in the nation, with the labour market steady and although the numbers showed extremely high growth in comparison to the depths of last year the recovery is trending in the right direction. Market reaction relatively muted on the back of the numbers, with investors sitting on their hands as strong gains for the week held up relatively well. Opening up this week above 0.7720, with the APAC pairs seeing the best gains since November as commodity markets posted strong gains and the inflation concerns waned for the time being. US equity markets finished the Friday session up 0.4%, while UST yields remain steady at 1.5798% as I write. Gold up 0.7%, while WTI crude is down slightly from Friday closing 0.5% in the red.

The Day Ahead




> JP February Revised Industrial Production : -2.1% exp.

> EU February Currency Account : 31.2Bio exp.

> CA March Housing Starts : 254K exp.


Likely to be a very quiet start to the week in Asia, while the data docket is light the reopening of the local borders may see an increase in sentiment as the Trans-Tasman bubble kicks off today. Uneventful week in terms of data, with the highlights coming by way of NZ inflation numbers and the ECB’s most recent policy meeting. Not expecting much movement from the ECB, while a strong move higher in NZ prices may send a few jitters through local markets. The Aussie looks poised to build on its bullish momentum higher, with a break of 0.7760 needed in the near term.


Range for the day : 0.7705 – 0.7770


AUD/USD Technicals


A break above the weekly high of 0.7761 may bring the March top back in play, with 0.7849 the target on a break higher. There is a chance of profit taking with the strong gains seen in the back half of last week, while the PBOC’s Yuan commentary from the weekend possibly boosting the demand for the Buck. The EXP200DMA at 0.7706 is the level watching this morning, with the 100DMA at 0.7675 the target on some bearish momentum.

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