AUD/USD Fundamental Analysis April 24, 2012 Forecast

Analysis and Recommendation: (close of Asian session)

The AUD/USD dropped a third of a US cent after the release of weaker than expected producer price index (PPI) data.

The Aussie was trading at 103.28, down from 103.62 T just before the data’s release.

The Australian dollar ended Friday at 103.38 US cents.

The PPI index fell 0.3 per cent in the March quarter, the Australian Bureau of Statistics (ABS) said on Monday, which was below market forecasts of a rise of 0.5 per cent in the quarter.

The PPI is a measure of inflation and can influence expectations for the more closely-watched March quarter consumer price index (CPI), due out on Tuesday.

The CPI figures are seen as crucial for the RBA’s interest rate decision at its May board meeting after the bank’s governor, Glenn Stevens, indicated a cut in the cash rate was likely if inflation was not too high.

Lackluster results from China also helped depress the Australian dollar in today’s trading

China’s manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC’s so-called “flash” Purchasing Managers’ Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The improvement in factory conditions in April suggests that the earlier easing measures have started to work and hence should ease concerns of a sharp growth slowdown.

Eco data for Monday April 23, 2012 actual v. forecast that affect the ANZ, JPY, NZD and CNY

Apr. 23

 

AUD

 

 

 

PPI (QoQ) 

-0.3%

 

0.4% 

 

0.3% 

 

 

 

 

CNY

 

 

 

Chinese HSBC Manufacturing PMI 

49.10

 

 

 

48.30 

   

Economic Events scheduled for April 24, 2012 that affect the NZD, AUD, JPY and CNY

02:30     AUD      CPI (QoQ)                                                                                                            0.6%       

The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.

02:30     AUD      Trimmed Mean CPI (QoQ)                                           0.6%                      0.6%

The Trimmed Mean Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers, excluding the most volatile 30% of items. This data helps illustrate underlying inflation trends. A higher than expected reading should be taken as positive/bullish for the AUD, while a lower than expected reading should be taken as negative/bearish for the AUD.

15:00     USD       CB Consumer Confidence                                            70.3                        70.8

Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.

15:00     USD       New Home Sales                                                             320K                      313K     

New Home Sales measures the annualized number of new single-family homes that were sold during the previous month. This report tends to have more impact when it’s released ahead of Existing Home Sales because the reports are tightly correlated

Government Bond Auctions (this week)

Apr 24  00:30  Japan  Auctions 20Y JGBs

Apr 24  08:30  Holland  Eur 1.5-2.5bn Jul 2014 & Jan 2037 DSL auction

Apr 24  08:30  Spain  3 & 6M T-bill auction

Apr 24  09:10  Italy   Auctions CTZ/BTPei

Apr 24  14:30  UK  Details Conventional Gilt auction on May 01 & I/L auction on May 03

Apr 24  17:00  US  Auctions 2Y Notes

Apr 25  09:10  Sweden  Auctions T-bills

Apr 25  09:30  Germany  Eur 3.0bn new Jul 2044 Bund

Apr 25  14:30  Sweden  Details nominal bond auction on May 02

Apr 25  17:00  US  Auctions 5Y Notes

Apr 26  00:30  Japan  Auctions 2Y JGBs

Apr 26  09:10  Italy   BOT auction

Apr 26  14:30  Sweden  Details I/L bond auction on May 03

Apr 26  17:00  US  Auctions 7Y Notes

Apr 27  09:10  Italy   BTP/CCTeu auction

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