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Global Market Update
The View from Australia

by Craig Killaby | May 5, 2021



> NZ Q1 Employment Change & Unemployment Rate : 0.6% & 4.7% v. 0.3% & 4.9% exp.

> AU March Building Approvals : 17.4% v. 2.9% exp.

> EU April Final Services PMI : 50.5 v. 50.3 exp.

> US April ADP Non-Farm Employment Change : 742K v. 872K exp.

> US April ISM Services PMI : 62.7 v. 64.2 exp.

> US EIA Crude Oil Inventories : -8.0Mio v. -1.9Mio exp.


Overnight Headlines (BBG)

> The US has decided to support the emergency decision to release the patents on the MRNA vaccines in hopes to ramp up the production and distribution of the crucial Pfizer and Moderna vaccines

What you need to know

As has been the norm across financial markets, whenever there seems to be a pullback in risk sentiment the dip buyers have come in to see losses pared as inflation fears were dismissed by Fed members yet again overnight. The data in Asia was light yesterday, which saw the AUDUSD slowly trickle higher throughout the session and touching a high of 0.7738 before retreating into the European session. Building approvals numbers surged locally, driven by apartment approvals, while the sentiment in APAC was boosted by the very strong NZ employment numbers that came out first thing. The hopes are that the strong job gains from across the Tasman are translated into the same onshore, with the NZD outperforming against most of the majors and up near 1% against the unchanged Dollar.


Data out of the US continues to point to a strong recovery, with private payroll figures setting the table for a positive employment report tomorrow night. News that the US will support the patent release of MRNA vaccines is a good sign for the ability to ramp up production of the crucial MRNA vaccines as developing nations struggle to gain access to the jabs. Inflation expectations continue to rise in the wake of higher commodity prices, while US equity markets shrugged off any fears for the time being as the S&P500 closed up 0.4%. Mixed bag on the commodities front overnight, with WTI crude the biggest loser down 1.2% while Copper also fell 0.6% on the session.


The Day Ahead




> NZ March Building Consents : -18.2% prev.

> NZ May Prelim ANZ Business Confidence : -8.4 prev.

> UK April Final Services PMI : 60.2 exp.

> AU RBA Dep Gov. Debelle to speak

> UK Bank of England Monetary Policy Decision : 0.10% exp.

> US Unemployment Claims : 540K exp.

> US FOMC Member Bostic to speak


Expecting a lacklustre session in terms of price action, with the AUDUSD still trapped in its recent range the lack of data on the cards today does not lend for a break in either direction. Major shifts in policy will likely be needed from the world’s central banks to see range broken, and unlikely to see this come from the Bank of England this evening. US Non-Farm Payrolls will bookend a relatively uneventful week tomorrow night, with the RBA’s SOMP the risk for local markets at 11:30am tomorrow. Range bound expected yet again, with the bland macro picture still into place.


Range for the day : 0.7720 – 0.7775


AUD/USD Technicals


Rinse and repeat for the technical picture with 0.7816 and 0.7691 the key levels on both ends, with the pair hovering around the EXP200MA at 0.7741 as I write. No reason for a break today, with sentiment still the key driver.

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