From David Scutt, Treasury Dealer at Arab Bank, here’s a quick run-through of what the Australian market will be yakking about this morning, including the PEFO and NAB’s business survey.
Go to it.
– The ASX 200 looks set to continue where it left off yesterday despite falls in offshore markets with SPI futures pointing to a rise of 7pts on the open. While this is due to the late bounce on Wall St, something that was fuelled by wafer-thin volumes, given the close correlation between our market and the Shanghai Composite yesterday, it appears likely that whatever direction it takes will be mirrored by us today.
– Having taken advantage of a quiet US calendar, impressive Chinese data and short positioning in the market, the AUDUSD’s rally has come to an abrupt end overnight with the pair sinking to as low as .9136 on the back of pre-emptive tapering fears. While support at this level has held so far, given positioning is now far more neutral and with major data events to come this evening, it wouldn’t surprise to see the pair remain under pressure today despite a quiet Asian calendar. Support starts at .9137, .9100 and again at .9082 with resistance kicking in at .9180 and again at .9220.
– The PEFO, the Pre-election Economic and Fiscal outlook statement, will be released at 10am this morning. While it will get plenty of coverage in the media, its impact on markets should be negligible.
– The NAB business survey for July will be released at 11.30am this morning. In light of the election being called and likely reduction in interest rates (the survey would have been conducted prior to the recent rate cut), it will be interesting to see whether we get a bounce in both current conditions and expectations. On the regional front we’ll also receive Japanese machine orders for June along with minutes from the Bank of Japan’s June monetary policy meeting.
– The economic calendar picks up a notch tonight with US retail sales the undisputed headline act. Elsewhere we’ll receive CPI readings from Germany, the UK and Spain, Eurozone industrial production, ZEW investor sentiment from Germany along with import/export prices and business inventories from the States. On the policy front, we’ll also hear from Atlanta Fed President Dennis Lockhart.
David Scutt is on Twitter.