News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Global Market Update
The View from Australia

by Craig Killaby | May 2, 2021

Data/Speakers

 

> JP April Final Manufacturing PMI : 53.6 v. 51.6 exp.

> CN April Manufacturing & Non-Manufacturing PMI : 51.1 & 54.9 v. 55.9 & 51.8 exp.

> AU Q1 PPI : 0.4% v. 0.3% exp.

> EU April German Prelim GDP : -1.7% v. -1.5% exp.

> CA February GDP : 0.4% v. 0.5% exp.

> US March Core PCE Price Index : 0.4% v. 0.3% exp.

> US April Revised UoM Consumer Sentiment : 88.3 v. 87.3 exp.

 

Weekend Headlines (BBG)

> Inflation commentary was the story at the end of the month, with Biden’s infrastructure spending plan for an economy that is recovery faster than expected brings the debate back to the forefront

What you need to know

The Dollar surged at the end of the month, with portfolio rebalancing flows and strong US data seeing the commodity pairs perform poorly on the day. The Aussie is showing a slight recovery as I write this morning, however back down towards the lower end of the recent range. Whether or not inflation is going to be a by-product of immense government spending from governments around the world is top of mind, with UST Secretary Yellen throwing water on the notion as the spend is going to be over a long period of time. The Buck is up 0.7% from Friday’s opening prices, and back above the 100DMA on the DXY. Mixed bag on the AUD crosses, with risk sensitive pairs lagging with AUDCHF and AUDCHF the worst performers. Equity markets both locally and abroad had a weak end to April, with he ASX 0.7% in the red while the S&P500 retreated off all time highs yet again. Commodity markets saw WTI crude lag, with oil down near 2% on the surging USD. While Copper and Gold also weaker on the day.

 

The Day Ahead

 

Data

 

> AU April AIG Manufacturing Index : 59.9 prev.

> AU April MI Inflation Gauge : 0.4% prev.

> AU April ANZ Job Advertisements : 7.4% prev.

> EU March German Retail Sales : 2.9% exp.

> EU April Final Manufacturing PMI : 63.3 exp.

> US April ISM Manufacturing PMI : 65.0 exp.

> US FOMC Member Williams to speak & Fed Chair Powell to speak

> JP/UK/CN Bank Holidays

 

Not expecting much during today’s session with the volume on the lighter side with offshore public holidays it feels like there may be a recovery for the AUD, although unlikely to break the range today. Need to really start thinking about the COVID19 outbreak in India as the situation seems to be worsening by the day. While tonight the Fed Chair Powell is due to speak, with a dovish tone expected following last week’s policy meeting.

 

Range for the day : 0.7700 – 0.7765

 

AUD/USD Technicals

 

Opening up with the pair above the 100DMA, although no breaks of the recent range it is likely to be a slow drift higher back up towards the exp200DMA at 0.7748. Need to see a close either below 0.7691 or above 0.7800 to see the direction change, unlikely today.

“Cambridge Global Payments” is a trade name, which in this document refers specifically to one or more of these legal entities: Cambridge Mercantile Corp., Cambridge Mercantile Corp. (U.S.A.), Cambridge Mercantile Corp. (Nevada), Cambridge Mercantile (Australia) Pty. Ltd.

Cambridge Global Payments (“Cambridge”) provides this document as general market information subject to: Cambridge’s copyright, and all contract terms in place, if any, between you and the Cambridge entity you have contracted with. This document is based on sources Cambridge considers reliable, but without independent verification. Cambridge makes no guarantee of its accuracy or completeness. Cambridge is not responsible for any errors in or related to the document, or for damages arising out of any person’s reliance upon this information. All charts or graphs are from publicly available sources or proprietary data. The information in this document is subject to sudden change without notice.

Cambridge may sell to you and/or buy from you foreign exchange instruments (including spot and/or derivative transactions; both kinds are here called “FXI”s) covered by Cambridge on a principal basis.

This document is NOT: 1) Advice of any kind, or 2) Approved or reviewed by any regulatory authority, or 3) An offer to sell or a solicitation of an offer to buy any FXIs, or to participate in any trading strategy.

Before acting on this document, you must consider the appropriateness of the information, based on your objectives, needs and finances. For advice, you must contact someone independent of Cambridge.

Certain FXIs mentioned in this document may be ineligible for sale in some locations, and/or unsuitable for you. Contact your Cambridge representative for further information regarding product availability/suitability before you enter into any FXI contract.

FXIs are volatile and may cause losses. Past performance of a FXI product cannot be relied on to determine future performance.

This document is intended only for persons in Canada, the US, and Australia. This document is not intended for persons in the UK or elsewhere in the EEA. In Australia, this publication has been distributed by Cambridge Mercantile (Australia) Pty. Ltd. (ABN 85 126 642 448, AFSL 351278); for the general information of its customers (as defined in the Corporations Act 2001). This entity makes no representations that the products or services mentioned in this document are available to persons in Australia or are necessarily suitable for any particular person or appropriate in accordance with local law.

Fees may be earned by Cambridge (and its agents) in respect of any business transacted with Cambridge.

The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact the applicable Cambridge if you wish to use Cambridge services to enter a transaction involving any instrument mentioned in this document.

© Copyright 2018, Cambridge Mercantile Corp., ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Cambridge Mercantile Corp. See www.cambridgefx.com for contact details.