Bell FX Currency Outlook: The Australian Dollar has traded in a narrow range overnight ahead of Thursday's batch of economic news.
Australia: It was a relatively quiet night. US data was good, China made its spending plans official and even Greece is considering re-entering the bond market. US equity markets are back at their highs, yields are higher, with the US 10-year above 2.8% for the first time since January and the USD is broadly stronger.
In Australia yesterday, residential building approvals declined 5.0% (m/m) with both houses and other residential buildings recording falls. Despite easing in February, dwelling approvals maintained a solid upward trend to be running at record highs and foreshadow uplift in residential construction activity going forward, further confirmation that labour demand is beginning to improve. Investors will be awaiting local retail sales and international trade data today, ahead of a speech by Reserve Bank governor Glenn Stevens in Brisbane.
Majors: In currency markets the USD rally maintained its momentum as economic data continued to support yields. While the better data drove stocks to fresh highs, cyclical currencies were overwhelmed by the strength of the USD. In offshore markets, the key event is the ECB policy meeting. We expect no change from the ECB at the April meeting.
CPI inflation eased in March but is expected to rebound in April. Overall, the continued stabilisation in growth and the unemployment rate (albeit the latter is still highly elevated) will likely result in no change from the ECB near-term.
- - 3 APR AU Retail Sales Feb
- - AU Trade Balance Feb
- - EC ECB Interest Rate Decision
- - US Trade Balance
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