aud

Aussie bulls raise the white flag

Against the backdrop of a harsher landing for the Chinese economy and an equally bumpy ride for the local economy, it is not surprising to see the Aussie bulls raising the white flag. According to the CFTC, net longs in the AUD fell by over 27K to 25,104 in the week ended May 8th, the lowest for six months. When the CFTC releases Aussie positions for this latest week, we are likely to see another sharp reverse in net longs, judging by the price action over the period. Read more

14/05/2012 @ 08:06 GMT

Creeping political paralysis

The implications of events in both France, and more so Greece, are seeping through markets and have made themselves known within most asset classes. In FX, it’s created further pressure on the high-beta currencies, with AUD/USD nudging very close to parity in overnight trading. The Kiwi and Mexican peso are also notably softer. On commodities, gold has pushed below the USD 1,600 level, down 2% yesterday and, significantly, breaking below the long-term uptrend line drawn from the November 2008 lows. Read more

09/05/2012 @ 07:00 GMT

Fiscal austerity journeys down under

Facing an electoral whitewash when it next goes to the polls, Australia’s Labour Government has opted for aggressive fiscal austerity in its latest budget in an attempt to gain back the mantle of financial responsibility and competence. Treasurer Swan threw around some very impressive-sounding fiscal figures in his budget speech – AUD 33.6bn of spending cuts over five years, a first annual decline in government spending for 42 years in fiscal 2012/13 and a return to a budget surplus next year after a AUD 44bn deficit in 2011/12. Read more

08/05/2012 @ 11:24 GMT

Aussie bulls worried by trade trends

For so long a major driver of currency strength, it now appears that the performance of the trade sector is contributing to the Aussie’s demise. March’s AUD 1.59bn trade deficit was the second worst in the past five years, with the shortfall for the previous month also being revised lower. In the first quarter, the goods and services trade deficit was almost AUD 3.2bn, this following a trade surplus of AUD 3.1bn in the previous quarter. Read more

08/05/2012 @ 09:35 GMT

Drawing the eurozone battle lines

After the initial weakening of the single currency on the back of the weekend’s political developments in both France and Greece, the euro crawled back through most of Monday’s session, although volumes were naturally muted by the London holiday. In France, there is a new President keen to rebalance the agenda in Europe towards growth and away from yet more austerity. In Greece, there is a mad scramble to try and form a government from the results of the latest election, which at present looks to be a tall order. Read more

08/05/2012 @ 07:33 GMT

Aussie fast losing friends

For the Aussie bulls, the past week or so have been very tough. After threatening 1.05 late last month, the AUD dropped to near 1.01 overnight, its lowest level for the year thus far. As we have been highlighting, it has been a combination of local and international forces that have sunk the currency. Last week the RBA surprised with a 50bp rate cut, and there looks to be more to come from the central bank – on Friday it published forecasts for both inflation and growth which were lower than previous estimates. Read more

07/05/2012 @ 08:17 GMT

Caution ahead of payrolls

Markets face up to the US jobs data today in tentative mood, Asian stocks having softened by the greatest degree in nearly two weeks overnight and the past two days having seen high-beta currencies, such as the Aussie and Korean won the weakest performers of the majors. The recent trend in jobless claims, together with the ADP data earlier in the week, have tempered expectations of a strong set of numbers, with the market looking for a 160k gain in headline payrolls following the softer 120k increase seen in March. Read more

04/05/2012 @ 07:16 GMT

Aussie insecurity

Sentiment towards the Aussie has taken a turn for the worse over the past week, in a manner which suggests that further weakness may be in store. Tuesday’s surprise 50bp rate cut from the RBA has certainly unsettled the currency, but other forces have contributed to the recent softness. Read more

03/05/2012 @ 08:29 GMT

The remarkably resilient Aussie

Although unexpected by many local commentators, the case for a 50bp rate cut by the Reserve Bank of Australia at its last policy meeting was a fairly compelling one. With the non-mining economy in recession and inflationary pressures abating it was clear that the Australian central bank needed to ease financial conditions significantly. Falling property prices would also have contributed to its boldness – according to the Australian Bureau of Statistics, established house prices fell by another 1.1% in the March quarter, a fifth consecutive decline.

02/05/12 @ 09:52 GMT by Michael Derks, Chief Strategist

RBA boldness should be applauded

Last night’s decision by the RBA to lower the cash rate by 50bp to 3.75% ought to be applauded. Faced with an economy which, outside the mining sector, is in recession and with inflation likely to be lower than expected, policy-makers rightly decided that financial conditions needed to be loosened considerably. Australia’s central bank would also be concerned by the continued decline in property prices – according to the ABS, established house prices fell by a further 1.1% in the first quarter, the fifth consecutive quarterly decline. Read more

01/05/2012 @ 07:37 GMT

Syndicate content