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Global Market Update
The View from Australia

by Craig Killaby | May 2, 2021



> 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




> 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.

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