Intraday Market Thoughts

Aussie Hit by CPI, Canada Sales Drop, onto US Confidence

by Patrik Urban
Apr 24, 2012 14:13

Australian CPI lower; BOJ to ease; UK public debt higher; Swiss trade surplus declined. Dutch, Spanish and Italian auctions without surprises. US session brings Canadian retail sales fell on the headline but rose on the core. US consumer confidence and new home sales. Monday's Premium Intermarket Insights include EURUSD, AUDUSD and Gold.

The Asian session saw the release of Australian Q1 CPI that eased significantly to 1.6% from 3.1% on annual basis. The Aussie sold off on the news to 1.0246 but has recovered a portion of its losses. A rate cut on May 1st seems probable so the selling pressure is likely to persist.

The London session opened on a positive note, sending the USD slightly lower across the board except the JPY. JPY crosses jumped higher on Reuters report that on Friday's policy meeting, the BOJ is likely to announce an increase of asset purchases by up to 10 trillion JPY ($123 bln). Over the past hour, the greenback started to gain traction and EURUSD declined back to 1.3150.

In the UK, public sector net borrowing rose in March and reached GBP 15.9 bln from February's result that was revised lower to GBP 9.9 bln. The debt/GDP hit a record high at 66%. Despite the expectations of a disappointing GDP result, GBP continues to be bid and oscillates around 1.6150 against the USD.

In other news, Swiss trade surplus in March reached CHF 1.69 bln from CHF 2.61 bln and Eurozone industrial orders declined 1.3% from previous -2.9%.

Dutch, Spanish and Italian debt auctions did not impact the market and passed without any surprises. Italy reached its target EUR 2.5 bln, Spain sold EUR 1.93 bln vs. 2 bln target and Dutch sold EUR 2 bln vs. 2.5 bln target.

Canadian retail sales fell 0.2% in Feb vs expected -0.1% from 0.5%, core sales +0.5 vs expected 0.5% from -0.5%.

US reports are due at 10:00 am ET. Consumer confidence is expected lower in April at 69.9 from 70.2 and new home sales are seen higher in March at 321K from 313K.

CAD could experience volatility at 3:30 pm ET when BoC Mark Carney testifies in Ottawa.

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