News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Global Market Update
The View from Australia

by Craig Killaby | June 8, 2021

Data/Speakers

 

> AU May NAB Business Confidence : 20 v. 23 revised prev.

> EU June ZEW Economic Sentiment : 81.3 v. 85.5 exp.

> EU June German ZEW Economic Sentiment : 79.8 v. 86.0 exp.

> EU Q2 Final Employment Change : -0.3% v. -0.3% exp.

> US April Trade Balance : -68.9 v. -68.5bio exp.

> US April JOLTS Job Openings : 9.29Mio v. 8.18Mio exp.

 

Overnight Headlines (BBG)

> The EU/US will look to end their multi year trade disagreements as the US goes on a mission to repair trade relationships with some of their key allies under this administration

> US President Biden has finished negotiations with the GOP group Capito with no deal on the infrastructure package as yet while sticking to tax increases

What you need to know

Another uneventful session, much as expected as investors are clearly choosing to sit on their hands ahead of a very important Thursday with US CPI and the ECB due to meet. The data in Asia was centred around the NAB business confidence/conditions numbers, which was mixed as conditions rose month/month although confidence was unable to see strong gains. Market reaction for the AUDUSD was minimal, largely unchanged on the release and trading well within its 30pip range for the session.

 

In Europe, there are growing fears that the recent spike in COVID19 cases in the UK is going to delay the much anticipated reopening plan as the Delta variant, previously known as the Indian strain, is seeing cases skyrocket. GBPUSD was a touch softer on the session, although largely recovering to finish the session unchanged.

 

In the US, the job openings numbers climbed to a huge 9.3mio in April, although the focus for the data is well and truly on the inflation print tomorrow night. Negotiations in Congress from President Biden and team have continued on their infrastructure plan, with no deal as yet with the two sides unable to come to a compromise. Fairly strong move lower in UST yields despite the inflation angst, with the 10y down as much as 6.1bps on the day. US equity markets hovering around gains/losses, with the S&P500 closing the session up with marginal gains. Commodities seem to have regained their lustre, the move lower in UST yields helping the cause as Base Metals performed very well with Iron ore up 5.5% while Copper able to edge out 0.5% gains. WTI crude has breached the US$70/barrel level, up another 1.15% and continuing its strong move higher. Gold prices have slumped a touch, down 0.3% and struggling to hold above US$1900/oz.

 

The Day Ahead

 

Data

 

> AU RBA Ast. Gov. Kent to speak (9:30am AEST)

> AU June Westpac Consumer Sentiment : -4.8% prev.  

> NZ June Prelim ANZ Business Confidence : 1.8 prev.

> CN May PPI & CPI : 8.5% & 1.6% exp. (y/y)

> CA BOC Rate Decision/Statement : 0.25% exp (no change)

> US May Final Wholesale Inventories : 0.8% exp.

> US EIA Crude Oil Inventories : -3.3Mio exp.

 

Should get some more action today during the Asian session, however the moves will likely be limited ahead of tomorrow’s US CPI report. RBA Ast. Gov. Kent’s speech today will be focused on debt markets, so will keep an eye on the Q&A period for any insight into local policy ahead of next month’s important meeting. Chinese May Consumer/Producer inflation numbers will hit the wires, with strong beats higher likely to cause some movement.

 

While, the Bank of Canada meeting this evening will be watched for further insight into tightening of policy following the announcement of bond tapering. Not expecting a major break today, unfortunately continuing to sit in the tight range on AUDUSD, although widened a touch on the increased data docket.

 

Range for the day : 0.7720 – 0.7780

 

AUD/USD Technicals

 

Little change to the technical picture yet again, with the pair feeling comfortable trading around the 50/100DMA ahead of Thursday’s print. Will need to see a close above 0.7760 to see further upside potential, the 0.7700 handle will be very important on the downside close.

“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.