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Global Market Update
The View from Australia

by Craig Killaby | April 29, 2021



> NZ March Trade Balance : 33Mio v. 33Mio exp.

> NZ April Final ANZ Business Confidence : -2.0 v. -8.4 prev.

> AU Q1 Import Prices : 0.2% v. -1.5% exp.

> US Q1 Advance GDP & Price Index : 6.4% & 4.1% v. 6.8% & 2.6% exp.

> US Unemployment Claims : 553K v. 545K exp.

> US March Pending Home Sales : 1.9% v. 4.2% exp.


Overnight Headlines (BBG)

> Inflation fears have started to come back into play, with commodity prices expected to surge as growth forecasts continue to point to a strong recovery

What you need to know

It looks like we may end the week unable to hold above the 0.7800 handle yet again, as rising inflation expectations sent risk appetite lower amidst strong data from the USA. The announcement yesterday that the AU government is going to continue to be stimulatory until the unemployment rate drops below 5% was a positive sign for the AUDUSD, and the pair was able to break to a high of 0.7816 before retreating. US President Biden’s address to Congress was a plea to get the massive infrastructure bill across the line, with the competition with China well in focus.


The Dollar opens up this morning a touch stronger, supported by a move back higher in UST yields across the curve. Growth in the US is at very high levels, with inflation the story as commodity prices remain elevated. US equity markets up on the session, with the S&P500 closing 0.7% in the black, while WTI crude got a boost higher on the strong growth numbers up near 1.9% on the day. The Aussie is off on the risk aversion, while the crosses are all looking a touch worse for ear as we head into the final day of April trading. Dollar demand may be seen again today, with the chances of a drift back towards 0.7700 well and truly on.


The Day Ahead




> JP April Final Manufacturing PMI : 51.6 exp.

> CN April Manufacturing & Non-Manufacturing PMI : 55.9 & 51.8 exp.

> AU Q1 PPI : 0.3% exp.

> EU April German Prelim GDP : -1.5% exp.

> CA February GDP : 0.5% exp.

> US March Core PCE Price Index : 0.3% exp.

> US April Revised UoM Consumer Sentiment : 87.3 exp.


Looking ahead to some choppy trading conditions today, with EOM flows and some data to from China’s PMI figures giving traders in Asia something to chew on. The Aussie’s inability to hold above 0.7800 may be a sign of a brief move lower in the near term as the Dollar regains some of its appeal. Expecting UST markets to continue to be a story, while local investors will start looking ahead to next week’s RBA meeting as the next risk.


Range for the day : 0.7720 – 0.7800


AUD/USD Technicals


The recent high of 0.7816 held well yesterday, and traders will need to see a close above 0.7800 before seeing a change in momentum. The pair is still well within the recent range, unlikely to break today as it continues to sit in the 0.7700-middle. Consolidation around support at the 100/50DMAs expected today, with the China data in focus.

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