News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Global Market Update
The View from Australia

by Craig Killaby | May 13, 2021



> NZ April Food Price Index : 1.1% v. 0.0% prev.

> JP March Current Account : 1.70T v. 1.87T exp.

> US Unemployment Claims : 473K v. 487K exp.

> US April H/Line PPI & Core PPI : 0.6% & 0.7% v. 0.3% & 0.4% exp.


Overnight Headlines (BBG)

> US President Biden has told GOP lawmakers that he is open to compromising on his massive infrastructure plan as the US economy continues to reopen

What you need to know

As has become the norm, a large selloff has been accompanied by a buying opportunity as US equity rebounded on positive data and chose to ignore potential inflation risks. The AUDUSD traded lower throughout the session, touching a fresh low of 0.7688 before rebounding and opening this morning largely unchanged on the day. The crosses are mixed, with AUDNZD the biggest loser as the NZD outperformed on some optimistic tones coming from NZ Pm Ardern’s speech yesterday. The Dollar is down marginally in DXY terms, with the move lower in UST yields a factor in the move.


The data from the US overnight showed that the reopening of the economy is moving in the right track, with unemployment claims lower than street estimates. However, inflationary themes continue to mount with McDonalds announcing they will be raising their base wages in an attempt to bring Americans back to work as wages start to creep higher. Producer prices from the US also rose more than expected, with both the core and headline numbers exceeding the market estimates. Market reaction relatively muted in FX, however commodities bore the brunt of the selloff overnight with WTI crude, Copper and Iron Ore all taking big losses. Gold the outlier, as the commodity starts to regain some of its lustre up 0.6% while Bitcoin took a nosedive as Elon Musk’s comments on Bitcoin hurt the entire cryptocurrency market.


The Day Ahead




> NZ April Business NZ Manufacturing Index : 63.6 prev.

> EU ECB Monetary Policy Meeting Accounts

> CA March Manufacturing Sales : 3.5% exp.

> US April Retail Sales & Core Retail Sales : 1.0% & 0.5% exp.

> US April Industrial Production : 0.9% exp.

> US May Prelim UoM Consumer Sentiment : 90.2 exp.

> US May Prelim UoM Inflation Expectations : 3.4% prev.


Likely to be a quiet session locally, with no data on the docket investors eyes will start to peer ahead to the very key AU employment report next Thursday as the next major risk. US data will be highlighted by the retail sales numbers for April, expected to be strong as the vaccination effort in the US builds even more momentum and the reopening continues. ECB accounts may show what members think about the potential rising inflationary pressures, due to be released tonight. Expecting tight range today above 0.7700, with equity futures driving sentiment.


Range for the day : 0.7685 -0.7760


AUD/USD Technicals


Fresh lows of 0.7688 gives us another target on a risk-off selloff, with the weekly close very important as the pair hovers around the 50/100DMAs. The bullish momentum seems to be slowed for now, with the inflation risks limiting the upside potential for the pair. Sliding commodities will dampen the mood, with 0.7760 still the key level for now.

“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 for contact details.