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Global Market Update
The View from Australia

by Craig Killaby | June 9, 2021

Data/Speakers

 

> AU June Westpac Consumer Sentiment : -5.2% v. -4.8% prev.  

> NZ June Prelim ANZ Business Confidence : -0.4 v. 1.8 prev.

> CN May PPI & CPI : 9.0% & 1.3% v. 8.5% & 1.6% exp. (y/y)

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

> US May Final Wholesale Inventories : 0.8% v. 0.8% exp.

> US EIA Crude Oil Inventories : -5.2Mio v. -3.3Mio exp.

 

Overnight Headlines (BBG)

> EU/UK tensions ramp up with the EU threatening tariffs on the UK as trade with Northern Ireland comes back into the forefront

> US President Biden has decided to revoke the bans on TikTok and Wechat, and looking at other software applications to ban with privacy concerns key

What you need to know

The Aussie opens up this morning down marginally from yesterday’s opening prices, with the data continuing to be light across the Asian session. Chinese CPI and PPI figures for May showed that producers are choosing to pass on the rising input costs to manufacturers, as producer prices in China rise at the fastest pace since 2008. The rising prices are not having a knock on impact into the CPI data as yet, with CPI still lagging behind. Market reaction was minimal on the print, with the AUDUSD trading in a tight range for the majority of the session.

 

Overnight, the Bank of Canada kept their policy unchanged and maintained their current amount of bond purchases, which was expected by street forecasts. Also, tensions with the UK/EU are rising as trade disputes centred around Northern Ireland could see the EU put tariffs on the UK as the fresh divorce gets off on the wrong foot. GBPUSD struggled on the session and down towards the 1.4100 level. UST yields are down sharply across the curve, with the UST 10y yield dipping below the 1.5000% level. US equity markets off a touch, as the S&P500 closed  0.2% in the red. Commodity markets mixed, with Iron ore continuing its move higher while Copper and WTI crude were unable to hold on to gains seen yesterday.

 

The Day Ahead

 

Data

 

> AU May MI Inflation Expectations : 3.5% prev.

> EU ECB Monetary Policy Statement/Decision & Press Conference : 0.00% exp. (no change)  

> US May H/line CPI & Core CPI : 0.4% & 0.5% exp.

> US Unemployment Claims : 370K exp.

 

A very quiet session locally, however the overnight session should provide for some movement with the US inflation report and ECB meeting giving investors something to trade. Not expecting much movement ahead of the very important CPI print, with markets likely positioning ahead of the release.

 

Range for the day : 0.7690 – 0.7780

 

AUD/USD Technicals

 

The 50/100DMAs have proven to be a solid support as the pair braces for what may be an interesting overnight session. Need to see 0.7690 tested for further downside, while momentum higher may see 0.7790 the target.

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