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Global Market Update
The View from Australia

by Craig Killaby | April 21, 2021

Data/Speakers

 

> NZ Q1 CPI : 0.8% v. 0.8% exp.

> AU March Prelim Retail Sales : 1.4% v. 1.0% exp.

> UK March CPI : 0.7% v. 0.8% exp.

> CA March CPI : 0.5% v. 0.6% exp.

> CA Bank of Canada Rate Statement & Decision : 0.25% v. 0.25% v. 0.25% exp (no change)

> US EIA Crude Oil Inventories : 0.6Mio v. -3.7Mio exp.

 

Overnight Headlines (BBG)

> The Bank of Canada reduced their QE program, the first major Central Bank to cut back on their monetary stimulus measures

What you need to know

As per usual in this age of financial markets, any sort of pare back in sentiment has seen significant dip buying as investors chose to add to their positions following yesterday’s slight drop. The AUDUSD is back up towards the 0.7700 middle, with the pair touching an overnight high of 0.7762 following the surge in the Loonie following the removal of emergency bond buying from the Bank of Canada.

 

The Dollar is down a touch in DXY terms, although still above the 91.00 handle as I write this morning. Yesterday’s data was relatively positive for the local currency, with preliminary Retail Sales numbers coming in above market estimates and boosting sentiment in the region. Although momentum seemed to be starting to build to the upside it took the move higher in US equity markets to really push the pair through the 0.7730 level. Commodity markets a mixed bag, with Iron ore softening on the session down a tick over 1% while Gold is up 0.9% despite the move back into positive risk sentiment. The S&P500 is up 0.9% on the day, while WTI crude fell over 2% although still sitting a few ticks above the 61.00 level.

 

The Day Ahead

 

Data

 

> AU Q1 NAB Quarterly Business Confidence : 14 prev.

> EU ECB Monetary Policy Statement & Press Conference : 0.00% exp.

> US Unemployment Claims : 607K exp.

> EU March Consumer Confidence : -11 exp.

> US March Existing Home Sales : 6.18Mio exp.

 

The data is light yet again, with the local NAB business quarterly survey the only real piece of data to move the needle during today’s session. Expecting some sideways trading today following the swings in the early part of the week, with investors likely to sit on their hands with the ECB on the docket tonight. US unemployment claims will be the data highlight overnight, as continued positive data out of the US will set the stage for some more risk on tones.

 

Range for the day : 0.7720 – 0.7780

 

AUD/USD Technicals

 

The pair seems to have found a comfortable consolidation level at 0.7760, with the 55DMA acting as support. Need to see a break back towards 0.7800 to see a clear signal that the bullish run will continue, likely needing next week’s key data to see that push higher. Consolidation today is expected.

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