AUD: AUDUSD Range Trading, Jobs Data & RBA’s Hauser Coming Up
Feb-19 21:11
AUDUSD was little changed on Wednesday falling moderately to 0.6348 after a low of 0.6337. The pair reached a high of 0.6370 late in APAC trading. It has been in a narrow range all week and especially since the RBA’s hawkish rate cut. The USD is 0.2% higher driven by Ukraine-related euro weakness.
- AUDUSD’s bullish theme remains intact trading above key resistance at 0.6331. However, moving average studies remain in a bear mode position suggesting that the latest shift higher is corrective. Initial support is at 0.6305, 50-day EMA, and resistance at 0.6384, 13 December high.
- The yen outperformed yesterday leaving AUDJPY down 0.5% to 96.15 after it fell to 96.00.
- NZDUSD was little changed following the widely forecast 50bp RBNZ rate cut. AUDNZD is down slightly to 1.1132 but held above 1.11 through the day.
- The weaker euro left AUDEUR up 0.1% to 0.6089 after a high of 0.6097. AUDGBP is also 0.1% higher at 0.5043 following a peak of 0.5051.
- Equities were mixed with the S&P up 0.2% but the Euro stoxx down 1.3%. Oil prices continued to climb with Brent +0.4% to $76.12/bbl. Copper fell 0.4% and iron ore is around $107/t.
- Today January employment data are released and a 0.1pp rise in the unemployment rate to 4.1% with 20k new jobs is forecast. RBA deputy governor Hauser is scheduled to speak to Bloomberg at 1315 AEDT.
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CANADA: JPM: Traditional Core Expected To Show First Increase Since December
Jan-20 21:11
- JPMorgan see headline CPI accelerating to 2.1% Y/Y in December, helped by "an unusually modest decline in December prices at the pump and stability in energy prices overall."
- They project core CPI (CPIxFE) increased a tenth to 2.0% Y/Y in December, its first increase since September but keeping a downward trajectory “relatively intact”.
- “Goods inflation moved sideways in November and looks to have stabilized after a few months of negative growth in the year-ago rate, while services prices are gradually cooling but remain elevated.”
- “Growth in shelter prices dipped below 5.5%oya in November for the first time since mid-2022, but is still driving the stickiness in overall services price gains.”
- “We expect mortgage interest costs to moderate further following 50bp cuts at each of the last two BoC meetings and 175bp overall since last June.”
USDCAD TECHS: Breaches Support
Jan-20 21:00
- RES 4: 1.4671 2.0% 10-dma envelope
- RES 3: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4486 Intraday high
- PRICE: 1.4323 @ 16:50 GMT Jan 20
- SUP 1: 1.4262 Low Jan 20
- SUP 2: 1.4226 50-day EMA
- SUP 3: 1.4120 Low Dec 11
- SUP 4: 1.4011 Low Dec 5
A sharp sell-off in USDCAD Monday resulted in a print below support at 1.4280, the 20-day EMA. Pice has also traded through the 20-day EMA, at 1.4364. The reversal has exposed the next key support at 1.4226, the 50-day EMA. A clear breach of the 50-day EMA would undermine the recent bullish theme and signal scope for a deeper retracement. Key resistance and the bull trigger has been defined at 1.4486, Monday’s intraday high.
CANADA: GS See Significant Uncertainty Over Tax Holiday Impact On CPI
Jan-20 20:46
- Goldman Sachs highlight four key elements to watch in the December CPI report:
- i) “our forecast assumes a 34bp drag on headline inflation from the start of the GST/HST tax holiday in mid-December, but we acknowledge significant uncertainty around how the cumulative 70bp tax holiday drag will be distributed across the December and January inflation releases.”
- ii) “we expect a spike in energy inflation, but soft food inflation due to the sales tax holiday on several food items such as restaurant meals.”
- iii) “we forecast an uptick in homeowners’ replacement cost inflation—reflecting higher new house prices—and a slight moderation in rent prices, as asking prices declined for the third consecutive month.”
- iv) “we expect mortgage interest cost inflation will continue to moderate following rate cuts.”
