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Andro Matugas-Barnes
Apr 03 2019

TAT FX Brief: Apr19

News & Insights
TAT FX Brief: Apr19
<p>The Australian dollar fell heavily on Tuesday, losing ground against all major crosses except the New Zealand dollar during the session.</p> <p>As seen in the 30-minute AUD/USD chart below, the bulk of the Aussie&rsquo;s fall occurred immediately after the release&nbsp;of the Reserve Bank of Australia&rsquo;s (RBA) April interest rate decision that arrived midway through the Asian session.</p> <p>While the RBA kept the cash rate unchanged at 1.5% and maintained a neutral policy bias, implying there&rsquo;s unlikely&nbsp;to be near-term change in interest rates, the board tweaked its commentary in the final paragraph of the statement&nbsp;for the first time in several years. To many, this seemingly innocuous change was significant, hinting the RBA may be&nbsp;far closer to easing policy settings further than many previously thought.</p> <p>&ldquo;The RBA made a very subtle change to the final paragraph of its statement that could be interpreted as a dovish&nbsp;tilt,&rdquo; said Joseph Capurso, Senior Currency Strategist at the Commonwealth Bank.</p> <p>&ldquo;[The board said it] will &lsquo;continue to monitor developments and set monetary policy to support sustainable growth&nbsp;in the economy&rsquo;. The word &lsquo;set&rsquo; could be interpreted as the RBA considering a policy setting change if the Australian&nbsp;and global economic data and risks to the outlook deteriorates.</p> <p>&ldquo;In previous months the board had indicated that &lsquo;holding the stance of monetary policy unchanged&rsquo; is &lsquo;consistent&nbsp;with sustainable growth in the economy&rsquo;.</p> <p>The Aussie dollar sank in response, hitting a session low of .7053 before rebounding into the close.</p> <p>As is usually the case, there was next to no reaction in financial markets to the release of Australia&rsquo;s federal budget,&nbsp;suggesting few saw the details of meaningfully shifting the outlook for the economy nor RBA interest rate settings.</p> <p>Against the major crosses, the Aussie lost ground against the British pound with the latter finding support from&nbsp;another request to delay Brexit.</p> <p>&ldquo;The pound after news that Theresa May would seek cross party support to break the impasse in the Brexit process,&rdquo;&nbsp;Capurso said. &ldquo;May said she will seek a further extension of Article 50 and a deal to leave the EU. This puts off a&nbsp;&lsquo;hard Brexit&rsquo; on 12 April.&rdquo;</p> <p>Elsewhere, the Aussie managed to eke higher against the New Zealand dollar which was weighed down by another&nbsp;weak business confidence reading, bolstering the view that the RBNZ will act upon its newly-implemented easing&nbsp;bias and cut its cash rate again. The latest fortnightly dairy auction also underwhelmed, placing further downside&nbsp;pressure on the Kiwi.</p> <p>Turning to the day ahead, it will be another big day of data with several major releases scheduled both at home and&nbsp;abroad.</p> <p>Locally, the Ai Group&rsquo;s Performance of Services Index for March will be released at 8.30am AEDT. That will be&nbsp;followed by the double-whammy of retail sales and international trade data for February at 11.30am AEDT.</p> <p>Retail is expected to lift by 0.3% following a 0.1% gain in January. The trade surplus is tipped to narrow to $3.7&nbsp;billion, down from $4.55 billion a month earlier.</p> <p>Both reports carry the potential to generate short-term volatility in the Aussie dollar.</p> <p>Outside of Australia, the main highlights on Wednesday will be the release of services PMIs from China, Eurozone,&nbsp;UK and US. Aside from those reports, Eurozone retail sales and ADP private sector payrolls from the US are the other&nbsp;headline acts.</p> <p>On the Fed front, Bostic and Kashkari are set to be in action.</p> <p><strong>Today&rsquo;s Ranges [12/04/2019]:</strong></p> <ul> <li>AUD/USD 0.7116-0.7128&nbsp;</li> <li>AUD/EUR 0.6320-0.6334&nbsp;</li> <li>AUD/GPB 0.5452-0.5460&nbsp;</li> <li>AUD/CNY 4.7812-4.7899&nbsp;</li> <li>AUD/INR 49.112-49.201</li> </ul> <p><strong>Announcements to Watch</strong></p> <p>Monday, April 1, 2019</p> <p>10:50 &nbsp;&nbsp;JPY Tankan Large Manufacturers Index (Q1) 12 13 19<br /> 10:50 &nbsp;&nbsp;JPY Tankan Large Non-Manufacturers Index (Q1) 21 22 24<br /> 12:45 &nbsp;&nbsp;CNY Caixin Manufacturing PMI (Mar) 50.8 50.1 49.9<br /> 18:55 &nbsp;&nbsp;EUR German Manufacturing PMI (Mar) 44.1 44.7 44.7<br /> 19:30 &nbsp;&nbsp;GBP Manufacturing PMI (Mar) 55.1 51.2 52.1<br /> 20:00 &nbsp;&nbsp;EUR CPI (YoY) (Mar) 1.4% 1.5% 1.5%<br /> 23:30 &nbsp;&nbsp;USD Core Retail Sales (MoM) (Feb) -0.4% 0.4% 1.4%<br /> 23:30 &nbsp;&nbsp;USD Retail Sales (MoM) (Feb) -0.2% 0.3% 0.7%</p> <p>Tuesday, April 2, 2019</p> <p>01:00 &nbsp;&nbsp;USD ISM Manufacturing PMI (Mar) 55.3 54.5 54.2<br /> 05:55 &nbsp;&nbsp;CAD BoC Gov Poloz Speaks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> 14:30 &nbsp;&nbsp;AUD RBA Interest Rate Decision (Apr) 1.50% 1.50% 1.50%<br /> 14:30 &nbsp;&nbsp;AUD RBA Rate Statement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> 19:30 &nbsp;&nbsp;GBP Construction PMI (Mar) 49.7 49.8 49.5<br /> 23:30 &nbsp;&nbsp;USD Core Durable Goods Orders (MoM) (Feb) 0.1% 0.3% -0.1%</p> <p>Wednesday, April 3, 2019</p> <p>11:30 &nbsp;&nbsp;AUD Retail Sales (MoM) (Feb) 0.8% 0.3% 0.1%<br /> 19:30 &nbsp;&nbsp;GBP Services PMI (Mar) &nbsp;&nbsp;51.0 51.3<br /> 23:15 &nbsp;&nbsp;USD ADP Nonfarm Employment Change (Mar) &nbsp;&nbsp;184K 183K</p> <p>Thursday, April 4, 2019</p> <p>01:00 &nbsp;&nbsp;USD ISM Non-Manufacturing PMI (Mar) &nbsp;&nbsp;58.1 59.7<br /> 01:30 &nbsp;&nbsp;USD Crude Oil Inventories &nbsp;&nbsp;-0.425M 2.800M<br /> 17:15 &nbsp;&nbsp;INR Interest Rate Decision &nbsp;&nbsp;6.00% 6.25%<br /> 18:30 &nbsp;&nbsp;GBP Construction PMI (Mar) &nbsp;&nbsp;49.8 49.5<br /> 22:30 &nbsp;&nbsp;EUR ECB Publishes Account of Monetary Policy &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>Friday, April 5, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Hong Kong - Ching Ming Festival<br /> All Day &nbsp;&nbsp;Holiday China - Ching Ming Festival<br /> 01:00 &nbsp;&nbsp;CAD Ivey PMI (Mar) &nbsp;&nbsp;51.1 50.6<br /> 23:30 &nbsp;&nbsp;USD Nonfarm Payrolls (Mar) &nbsp;&nbsp;180K 20K<br /> 23:30 &nbsp;&nbsp;USD Unemployment Rate (Mar) &nbsp;&nbsp;3.8% 3.8%<br /> 23:30 &nbsp;&nbsp;CAD Employment Change (Mar) &nbsp;&nbsp;1.0K 55.9K</p> <p>Wednesday, April 10, 2019</p> <p>01:00 &nbsp;&nbsp;USD JOLTs Job Openings (Feb) &nbsp;&nbsp;&nbsp;&nbsp;7.581M<br /> 19:30 &nbsp;&nbsp;GBP Manufacturing Production (MoM) (Feb) &nbsp;&nbsp;&nbsp;&nbsp;0.8%<br /> 22:45 &nbsp;&nbsp;EUR ECB Interest Rate Decision (Apr) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> 23:30 &nbsp;&nbsp;USD Core CPI (MoM) (Mar) &nbsp;&nbsp;0.2% 0.1%</p> <p>Thursday, April 11, 2019</p> <p>23:30 &nbsp;&nbsp;USD PPI (MoM) (Mar) &nbsp;&nbsp;0.3% 0.1%</p> <p>Tuesday, April 16, 2019</p> <p>12:30 &nbsp;&nbsp;AUD RBA Meeting Minutes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br /> 19:30 &nbsp;&nbsp;GBP Average Earnings Index +Bonus (Feb) &nbsp;&nbsp;3.2% 3.4%<br /> 19:30 &nbsp;&nbsp;GBP Claimant Count Change (Mar) &nbsp;&nbsp;&nbsp;&nbsp;27.0K<br /> 20:00 &nbsp;&nbsp;EUR German ZEW Economic Sentiment (Apr) &nbsp;&nbsp;-11.0 -3.6</p> <p>Wednesday, April 17, 2019</p> <p>All Day &nbsp;&nbsp;Holiday India - Dr.Baba Saheb Ambedkar Jayanti<br /> &nbsp;&nbsp;Holiday Norway - Easter - Early close at 13:00<br /> 09:45 &nbsp;&nbsp;NZD CPI (QoQ) (Q1) &nbsp;&nbsp;&nbsp;&nbsp;0.1%<br /> 13:00 &nbsp;&nbsp;CNY GDP (YoY) (Q1) &nbsp;&nbsp;6.3% 6.4%<br /> 13:00 &nbsp;&nbsp;CNY Industrial Production (YoY) (Mar) &nbsp;&nbsp;5.9% 5.3%<br /> 19:30 &nbsp;&nbsp;GBP CPI (YoY) (Mar) &nbsp;&nbsp;1.8% 1.9%<br /> 20:00 &nbsp;&nbsp;EUR CPI (YoY) (Mar) &nbsp;&nbsp;&nbsp;&nbsp;1.4%<br /> 23:30 &nbsp;&nbsp;CAD Core CPI (MoM) (Mar) &nbsp;&nbsp;&nbsp;&nbsp;0.7%</p> <p>Thursday, April 18, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Norway - Maundy Thursday<br /> &nbsp;&nbsp;Holiday Sweden - Maundy Thursday - Early close at 13:00<br /> 12:30 &nbsp;&nbsp;AUD Employment Change (Mar) &nbsp;&nbsp;14.0K 4.6K<br /> 19:30 &nbsp;&nbsp;GBP Retail Sales (MoM) (Mar) &nbsp;&nbsp;&nbsp;&nbsp;0.4%<br /> 23:30 &nbsp;&nbsp;USD Core Retail Sales (MoM) (Mar) &nbsp;&nbsp;0.4% -0.4%<br /> 23:30 &nbsp;&nbsp;USD Philadelphia Fed Manufacturing Index (Apr) &nbsp;&nbsp;&nbsp;&nbsp;13.7<br /> 23:30 &nbsp;&nbsp;USD Retail Sales (MoM) (Mar) &nbsp;&nbsp;0.3% -0.2%<br /> 23:30 &nbsp;&nbsp;CAD Core Retail Sales (MoM) (Feb) &nbsp;&nbsp;0.2% 0.1%</p> <p>Friday, April 19, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Good Friday<br /> 23:30 &nbsp;&nbsp;USD Building Permits (Mar) &nbsp;&nbsp;1.300M 1.291M</p> <p>Monday, April 22, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Easter Monday<br /> 19:30 &nbsp;&nbsp;EUR German Manufacturing PMI (Apr) &nbsp;&nbsp;48.0 44.1</p> <p>Tuesday, April 23, 2019</p> <p>01:00 &nbsp;&nbsp;USD Existing Home Sales (Mar) &nbsp;&nbsp;5.10M 5.51M</p> <p>Wednesday, April 24, 2019</p> <p>01:00 &nbsp;&nbsp;USD New Home Sales (Mar) &nbsp;&nbsp;620K 667K</p> <p>Thursday, April 25, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Australia &amp;amp; New Zealand - ANZAC Day</p> <p>Friday, April 26, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Greece - Good Friday</p> <p>Saturday, April 27, 2019</p> <p>All Day &nbsp;&nbsp;Holiday South Africa - Freedom Day</p> <p>Monday, April 29, 2019</p> <p>All Day &nbsp;&nbsp;Holiday India - Election Day<br /> All Day &nbsp;&nbsp;Holiday Japan - Showa Day<br /> All Day &nbsp;&nbsp;Holiday Greece - Easter Monday</p> <p>Tuesday, April 30, 2019</p> <p>All Day &nbsp;&nbsp;Holiday Japan - Holiday<br /> &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp; &nbsp;Holiday Sweden - Declaration of Independence - Early close at 13:00</p>

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