News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Global Market Update
The View from Australia

by Craig Killaby | August 31, 2021



> CN August Manufacturing PMI & Non-Manufacturing PMI : 50.1 & 47.5 v. 50.2 & 52.1 exp.

> NZ August ANZ Business Confidence : -14.2 v. -3.8 prev.

> AU July Building Approvals : -8.6% v. -5.0% exp.

> AU Q2 Current Account : 20.5Bio v. 21.5Bio exp.

> CA June GDP : 0.7% v. 0.7% exp.

> US August Chicago PMI : 66.8 v. 68.0 exp.

> US August CB Consumer Confidence : 113.8 v. 122.9 exp.


Overnight Headlines (BBG)

> Volatility may start to increase in Canada as the incumbent PM faced a speedbump on a relatively soft GDP report, as the September 20th election inches closer

> Eurozone inflation has hit the highest level in a decade, reaching 3% in August as the decision to taper their robust PEPP plan comes into focus

What you need to know

The fallout from Powell’s speech continued, as some of the Dollar longs put into place leading up to Jackson Hole slowly unwind and risk appetite seemed to turn marginally positive in Asia. The Chinese PMIs missed the mark on the composite figure, as the services sector was hit by the resurgence of the COVID19 Delta variant and put some downside pressure on global growth prospects. AUDUSD was slightly softer on the release, although buoyed a short time later by the news from NZ that they will be easing restrictions as they seem to have quelled the recent COVID outbreak and investors started to look ahead to October, where it will be more likely than not that the RBNZ pulls the trigger on a rate hike. AUDNZD was the biggest cross mover on the session, touching fresh lows and down 0.4% on the day. The current account surplus in AU posted the largest on record, while the net export figures and private spending numbers have seen those economists positioned for a contraction in Q2 GDP refresh their figures higher and the AUDUSD got a nice boost into the close.


End of month flows a factor, with the Dollar struggling in the tail end of the Asia before settling. The pair touched a high of 0.7341 before paring gains into Europe and the US sessions. The ECB has been cautious in the wake of the pandemic, however inflationary pressures are starting to mount in the Eurozone and have some ECB members questioning when the tapering of purchases should take place. EURUSD was up, only to falter on some USD haven buying on some poor US data. That data came by way of softer consumer confidence figures, contracting in August and seeing the impact that the Delta strain is having on the economy. US equity markets unable to break through the recent highs on the S&P500, down 0.2% for the day, although having yet another stellar month of gains. UST yields broke higher across the curve, with the 2y,10y and 30y all up on the day. Commodity prices are softer as we open in Asia, as Iron Ore and Copper continue their very whippy run as the China growth story comes into focus. While WTI crude is lower ahead of the always contentious OPEC meetings, with production decisions in the limelight.


The Day Ahead




> JP August Final Manufacturing PMI : 52.4 exp.

> AU Q2 GDP : 0.5% exp.

> CN August Caixin Manufacturing PMI : 50.2 exp.

> EU August German Manufacturing PMI : 62.7 exp.

> OPEC Meetings

> US August ADP Non-Farm Employment Change : 620K exp.

> US August ISM Manufacturing PMI : 58.5 exp.

> US August ISM Manufacturing Prices : 83.8 exp.

> US EIA Crude Oil Inventories : -2.5Mio exp.

> US FOMC Member Bostic to speak


Today may show markets how the AU economy was tracking in Q2 before it was derailed as the Delta outbreak took a stranglehold on the local economy and locked up the vast majority of Australians. Growth is expected at 0.5%, with the number hinging on strong household consumption figures to ensure a technical recession is off the table for AU.


More Chinese PMI figures hitting the wires shortly after, while private payroll figures will be on the docket in the US ahead of the ISM manufacturing numbers. This may be the last day of major movement before consolidation leading into the US NFP report on Friday night, the question still remains post-Powell as to whether a strong report will actually move the goalposts for the Fed as they seem to be taking a very cautious approach to policy.


Range Today : 0.7290 – 0.7340


AUD/USD Technicals


Resistance at 0.7340 had held up quite well intraday, however the bulls seem relentless in the near term as they seem to be jumping on the dovish commentary from the Fed Chair in the early part of the week. That 21DMA is the level to watch intraday, now sitting at 0.7296 as the choppy EOM flows start to ease. The target on a breakout will be the 50DMA at 0.7381, with the GDP number the key today.

“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.