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Earlier in the Day:

Following a quiet start to the week, the economic calendar was on the busier side through the Asian session.

First quarter inflation figures out of Australia provided the Aussie Dollar with direction.

For the Aussie Dollar,

According to figures released by the ABS, consumer prices stalled in the 1st quarter, following a 0.5% quarterly rise in the 4th. Forecasts were for a 0.2% rise.

  • The largest price increases were seen in prices for vegetables (+7.7%) secondary education (+4.2%) and motor vehicles (+2.4%).
  • The surge in prices for vegetables was attributed to the ongoing drought that has limited supply.
  • Offsetting the prices increases were falls in prices for automotive fuel (-8.7%), domestic holiday, travel and accommodation (-3.8%) and international holiday, travel and accommodation (-2.1%).
  • The annual rate of inflation also softened from 1.8% to 1.3%. Forecasts were for the annual rate of inflation to come in at 1.5% in the 1st

The Aussie Dollar moved from $0.70895 to $0.70457 upon release of the figures. At the time of writing, the Aussie Dollar was down 0.87% to $0.7040, the slide coming on expectations of a need for a rate cut.


At the time of writing, the Japanese Yen was down just 0.01% to ¥111.87 against the U.S Dollar. The Kiwi Dollar was down 0.45% to $0.6627 for the session, as U.S Dollar strength and expectations of monetary policy divergence kicked in.

In the equity markets,

The Nikkei and ASX200 were up by 0.08% and 1.03% respectively at the time of writing. For the Hang Seng and CSI300, it was a mixed start to the day. The CSI300 found support, rising by 0.19%, while the Hang Seng was down by just 0.01%.


The Day Ahead:

For the EUR,

Germany’s IFO Business Climate Index figures are due out later this morning. Following last week’s disappointing manufacturing PMI numbers, today’s figures will need to impress to provide support.

While forecasts are EUR positive, the April composite PMI survey reported that manufacturing firms were at their most pessimistic since November 2012. Service sector firms also saw sentiment fall to the weakest since January. If the PMI survey is anything to go by, today’s figures could come up short of forecasts.

Corporate earnings will also influence through the day, though European corporates will need to really impress to support the EUR.

At the time of writing, the EUR was down 0.11% at $1.1215.

For the Pound,

It’s another quiet day on the economic calendar.

Brexit will remain the area of focus through the day. Things will likely heat up as the week progresses. A lack of progress in cross-party talks will raise the prospects of a vote of no confidence. As things stand, a general election and a decision by the voting population on what’s next may be the only solution…

At the time of writing, the Pound was down 0.02% to $1.2935.

Across the Pond,

There were no material stats due out of the U.S this afternoon. The focus will remain on corporate earnings results throughout the day.

While risk sentiment will be a key driver, with U.S corporate earnings in focus, earnings will need to disappoint to bring the Dollar bounce back to an abrupt halt.

Key earnings results include those for AT&T Inc., The Boeing Co., Caterpillar Inc., Facebook Inc., Microsoft Corp., PayPal Holdings Inc., Tesla Inc., and Visa Inc.

At the time of writing, the Dollar Spot Index was up by 0.03% to 97.665.

For the Loonie,

It’s a big day ahead. While there are no material stats scheduled for release, the Bank of Canada will deliver its April monetary policy decision.

Expectations are for the BoC to hold rates unchanged. The devil will be in the details, with the monetary policy report and press conference the key drivers.

If the latest BoC Business Outlook Survey is anything to go by, the BoC has little cause to shift from its dovish stance. There will be some uncertainty, however, following the pickup in inflationary pressure in April and narrowing of the trade deficit in February.

The Loonie was down 0.19% at C$1.3449, against the U.S Dollar, at the time of writing.

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