Author: Rhys Miles

As referenced yesterday, the AUD was unlikely to move much overnight as we get closer to today’s CPI data. A small continuation of yesterday’s sell off saw a low of 0.7078 early this morning and a subsequent rally back to 0.7100.

Today’s inflation data will be crucial in light of recent comments from the RBA where they have stated the driver of any rate move will be determined by the direction of inflation. An increase of 0.2% over the quarter is expected. This would see annual inflation dip to 1.5%, from 1.8% in Q4.

Overnight, we have the ECB economic bulletin and the Bank of Canada’s interest rate announcement.

Meanwhile, US new home sales fell by more than expected over March. Sales of previously owned homes fell 4.9% in March to a 5.21 million annual rate. However, the fall follows a strong February result.  Also, the spring sales season is shaping up well as US mortgage rates fall and home affordability improves.

Equities have enjoyed a stellar run. US stocks recorded an all- time closing high preceded by the All Ords almost 1% rally yesterday. Better than expected earnings reports from Coca- Cola, Twitter, Hasbro and Proctor and Gamble have been the catalyst supported by the diminishing likelihood of further interest rate increases from the Fed.