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Andro Matugas-Barnes
Jun 06 2019

TAT FX Brief: June'19

News & Insights
TAT FX Brief: June'19
<blockquote> <p><strong>The Reserve Bank of Australia (RBA) just cut official&nbsp;interest rates&nbsp;for the first time in nearly three years, and signalled it&rsquo;s unlikely to&nbsp;be the last move in the&nbsp;current easing cycle.</strong></p> </blockquote> <p>However, despite the prospect of even lower interest rate, the Australian dollar continued to rally on Tuesday, briefly rising above&nbsp;the 70 cent level against the greenback for the first time in three weeks.</p> <p>Despite the release of major Australian economic data, the&nbsp;RBA&rsquo;s interest rate cut,&nbsp;and a speech from RBA Governor Philip Lowe&nbsp;that signalled another cut in Australia&rsquo;s cash rate is likely this year, the bulk of the Aussie&rsquo;s move came in the second half of the&nbsp;session, sparked by growing expectations that the US Federal Reserve may cut interest rates too in the months ahead.</p> <p>In a speech delivered on Tuesday, Fed Chairman Jerome Powell indicated a willingness to cut interest rates should the need arise.</p> <p>&ldquo;We do not know how or when these issues will be resolved,&rdquo;&nbsp;Powell said&nbsp;in relation to trade tensions between the United States&nbsp;and China.</p> <p>&ldquo;We are closely monitoring the implications of these developments for the US economic outlook, and, as always, we will act as&nbsp;appropriate to sustain the expansion, with a strong labour market and inflation near our symmetric 2% objective.&rdquo;</p> <p>Along the same lines at Powell&rsquo;s comments, his deputy at the Fed, Vice Chair Richard Clarida, said that while the US economy is&nbsp;currently in a &ldquo;good place&rdquo;, the Fed would be prepared to take action if to prolong the economic expansion if required.</p> <p>&ldquo;We will put in policies that need to be in place to keep the economy, which is in a very good place right now, and it&rsquo;s our job to&nbsp;keep it there,&rdquo; Clarida told&nbsp;CNBC.</p> <blockquote> <p>The acknowledgment from the two most senior Fed officials that rates could be cut soon helped to propel&nbsp;US stocks to the largest&nbsp;gain since January. Commodity markets also rebounded, reflecting the improvement in investor risk appetite.</p> </blockquote> <p>As a result, the AUD/USD rose to as high as .7004 before getting knocked back below the figure towards the close.</p> <p>Whether the Aussie dollar will venture back above the .7000 level on Wednesday will likely be determined by the release of&nbsp;Australia&rsquo;s Q1 GDP report at 11.30am AEST.</p> <p>Markets are looking for a quarterly increase of 0.4%, an improvement on the 0.2% expansion seen in the final there months of&nbsp;2018. Despite the expected acceleration, growth over the year is tipped to slow to 1.8%, the weakest increase since the September&nbsp;quarter of 2009.</p> <p>This&nbsp;10-second guide&nbsp;has more on what to look out for in the GDP report.</p> <p>Before that arrives, the Ai Group will also release Australia&rsquo;s Performance of Services Index for May at 8.30am AEST.</p> <p>Services PMIs from China, the Eurozone, UK and US will also be released. Elsewhere, Eurozone retail sales and the May ADP&nbsp;National Employment Report in the US are the other headline acts.</p> <p>The US Federal Reserve will also release its latest Beige Book on economic conditions.</p> <p><strong>Today&rsquo;s Ranges:</strong></p> <p>AUD/USD: 0.6964 - 0.6974<br /> AUD/EUR: 0.6203 - 0.6215<br /> AUD/GBP: 0.5487 - 0.5496<br /> AUD/CNY: 4.8111 - 4.8181<br /> AUD/INR: 48.311 - 48.397</p> <p><strong>Announcements to Watch:</strong></p> <ul> <li>Sunday, June 2, 2019</li> </ul> <p>21:45 &nbsp;&nbsp;CNY&nbsp;Caixin Manufacturing PMI (May) 50.2 50.0 50.2</p> <ul> <li>Monday, June 3, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;New Zealand - Queen&amp;#39;s Birthday</p> <p>03:55 &nbsp;&nbsp;EUR&nbsp;German Manufacturing PMI (May) 44.3 44.3 44.3</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Manufacturing PMI (May) 49.4 52.0 53.1</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;ISM Manufacturing PMI (May) 52.1 53.0 52.8</p> <p>21:30 &nbsp;&nbsp;AUD&nbsp;Retail Sales (MoM) (Apr) -0.1% 0.2% 0.3%</p> <ul> <li>Tuesday, June 4, 2019</li> </ul> <p>00:30 &nbsp;&nbsp;AUD&nbsp;RBA Interest Rate Decision (Jun) 1.25% 1.25% 1.50%</p> <p>00:30 &nbsp;&nbsp;AUD&nbsp;RBA Rate Statement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Construction PMI (May) 48.6 50.5 50.5</p> <p>05:00 &nbsp;&nbsp;EUR&nbsp;CPI (YoY) (May)&nbsp;&nbsp;&nbsp;1.2% 1.3% 1.7%</p> <p>09:45 &nbsp;&nbsp;USD&nbsp;Fed Chair Powell Speaks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>21:30 &nbsp;&nbsp;AUD&nbsp;GDP (QoQ) (Q1) 0.4% 0.5% 0.2%</p> <ul> <li>Wednesday, June 5, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Singapore - Hari Raya Puasa</p> <p>All Day &nbsp;&nbsp;Holiday&nbsp;India - Eid-Ul-Fitr</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Services PMI (May) 51.0 50.6 50.4</p> <p>08:15 &nbsp;&nbsp;USD ADP Nonfarm Employment Change&nbsp;(May) 27K 180K 271K&nbsp;</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;ISM Non-Manufacturing PMI (May) 56.9 55.5 55.5</p> <p>10:30 &nbsp;&nbsp;USD&nbsp;Crude Oil Inventories 6.771M -0.849M -0.282M</p> <ul> <li>Thursday, June 6, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;South Korea - Memorial Day</p> <p>02:15 &nbsp;&nbsp;INR&nbsp;Interest Rate Decision &nbsp;&nbsp;5.75% 6.00%</p> <p>05:00 &nbsp;&nbsp;GBP&nbsp;BoE Gov Carney Speaks&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>07:45 &nbsp;&nbsp;EUR&nbsp;Deposit Facility Rate &nbsp;&nbsp;-0.40% -0.40%</p> <p>07:45 &nbsp;&nbsp;EUR&nbsp;ECB Marginal Lending Facility &nbsp;&nbsp;0.25% 0.25%</p> <p>07:45 &nbsp;&nbsp;EUR&nbsp;ECB Monetary Policy Statement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>07:45 &nbsp;&nbsp;EUR&nbsp;ECB Interest Rate Decision (Jun) &nbsp;&nbsp;0.00% 0.00%</p> <p>08:30 &nbsp;&nbsp;EUR&nbsp;ECB Press Conference&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>10:00 &nbsp;&nbsp;CAD&nbsp;Ivey PMI (May) &nbsp;&nbsp;56.2 55.9</p> <ul> <li>Friday, June 7, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Hong Kong - Tuen Ng Day</p> <p>All Day &nbsp;&nbsp;Holiday&nbsp;China - Tuen Ng Day</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Nonfarm Payrolls (May) &nbsp;&nbsp;185K 263K</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Unemployment Rate (May) &nbsp;&nbsp;3.6% 3.6%</p> <p>08:30 &nbsp;&nbsp;CAD&nbsp;Employment Change (May) &nbsp;&nbsp;8.0K 106.5K</p> <ul> <li>Sunday, June 9, 2019</li> </ul> <p>19:50 &nbsp;&nbsp;JPY&nbsp;GDP (QoQ) (Q1) &nbsp;&nbsp;0.4% 0.5%</p> <ul> <li>Monday, June 10, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Australia - Queen&#39;s Birthday</p> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Switzerland - Whit Monday</p> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Germany - Whit Monday</p> <p>Tentative &nbsp;&nbsp;GBP&nbsp;Inflation Report Hearings&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Manufacturing Production (MoM) (Apr) &nbsp;&nbsp;0.2% 0.9%</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;JOLTs Job Openings (Apr) &nbsp;&nbsp;7.240M 7.488M</p> <ul> <li>Tuesday, June 11, 2019</li> </ul> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Average Earnings Index +Bonus (Apr) &nbsp;&nbsp;3.4% 3.2%</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Claimant Count Change (May) &nbsp;&nbsp;&nbsp;&nbsp;24.7K</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;PPI (MoM) (May) &nbsp;&nbsp;0.2% 0.2%</p> <ul> <li>Wednesday,&nbsp;June 12, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Russia - Russia Day</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Core CPI (MoM) (May) &nbsp;&nbsp;0.2% 0.1%</p> <p>21:30 &nbsp;&nbsp;AUD Employment Change (May) &nbsp;&nbsp;14.0K 28.4K</p> <ul> <li>Thursday, June 13, 2019</li> </ul> <p>22:00 &nbsp;&nbsp;CNY&nbsp;Industrial Production (YoY) (May) &nbsp;&nbsp;5.5% 5.4%</p> <ul> <li>Friday, June 14, 2019</li> </ul> <p>06:30 &nbsp;&nbsp;RUB&nbsp;Interest Rate Decision (Jun) &nbsp;&nbsp;7.50% 7.75%</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Core Retail Sales (MoM) (May) &nbsp;&nbsp;0.3% 0.1%</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Retail Sales (MoM) (May) &nbsp;&nbsp;0.6% -0.2%</p> <ul> <li>Sunday, June 16, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;South Africa - Youth Day</p> <ul> <li>Monday, June 17, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;South Africa - Public Holiday</p> <p>21:30 &nbsp;&nbsp;AUD&nbsp;RBA Meeting Minutes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <ul> <li>Tuesday, June 18, 2019</li> </ul> <p>05:00 &nbsp;&nbsp;EUR German ZEW Economic Sentiment&nbsp;(Jun)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;-2.1</p> <p>05:00 &nbsp;&nbsp;EUR&nbsp;CPI (YoY) (May) &nbsp;&nbsp;1.7% 1.2%</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Building Permits (May) &nbsp;&nbsp;1.290M 1.290M</p> <ul> <li>Wednesday, June 19, 2019</li> </ul> <p>04:30 &nbsp;&nbsp;GBP&nbsp;CPI (YoY) (May) &nbsp;&nbsp;2.2% 2.1%</p> <p>08:30 &nbsp;&nbsp;CAD&nbsp;Core CPI (MoM) (May) &nbsp;&nbsp;&nbsp;&nbsp;0.3%</p> <p>14:00 &nbsp;&nbsp;USD&nbsp;FOMC Economic Projections&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>14:00 &nbsp;&nbsp;USD&nbsp;FOMC Statement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>14:00 &nbsp;&nbsp;USD&nbsp;Fed Interest Rate Decision &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>18:45 &nbsp;&nbsp;NZD&nbsp;GDP (QoQ) (Q1) &nbsp;&nbsp;0.6% 0.6%</p> <ul> <li>Thursday, June 20, 2019</li> </ul> <p>All Day &nbsp;&nbsp;Holiday&nbsp;Brazil - Corpus Christi Day</p> <p>04:30 &nbsp;&nbsp;GBP&nbsp;Retail Sales (MoM) (May) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>07:00 &nbsp;&nbsp;GBP&nbsp;BoE Interest Rate Decision (Jun) &nbsp;&nbsp;&nbsp;&nbsp;0.75%</p> <p>08:30 &nbsp;&nbsp;USD&nbsp;Philadelphia Fed Manufacturing Index &nbsp;&nbsp;&nbsp;&nbsp;16.6&nbsp;(Jun)</p> <ul> <li>Friday, June 21, 2019</li> </ul> <p>03:30 &nbsp;&nbsp;EUR&nbsp;German Manufacturing PMI (Jun) &nbsp;&nbsp;44.8 44.3</p> <p>08:30 &nbsp;&nbsp;CAD&nbsp;Core Retail Sales (MoM) (Apr) &nbsp;&nbsp;0.9% 1.7%</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;Existing Home Sales (May) &nbsp;&nbsp;5.35M 5.19M</p> <ul> <li>Tuesday, June 25, 2019</li> </ul> <p>07:00 &nbsp;&nbsp;BRL&nbsp;BCB Copom Meeting Minutes&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;CB Consumer Confidence (Jun) &nbsp;&nbsp;130.0 134.1</p> <p>10:00 &nbsp;&nbsp;USD&nbsp;New Home Sales (May) &nbsp;&nbsp;&nbsp;&nbsp;673K</p> <ul> <li>Wednesday, June 26, 2019</li> </ul> <p>08:30 &nbsp;&nbsp;USD Core Durable Goods Orders (MoM)&nbsp;(May)&nbsp;</p>

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