Aussie the best performer after strong Chinese Data shifts global risk-sentiment

AUD - Australian Dollar

The Australian Dollar enjoyed a significant move higher on Friday after Chinese export and credit data drove a positive shift in risk sentiment. The risk on tone saw commodity currencies, including the Aussie drastically shift gears and outperform the market alongside global equities and rates. Opening this morning at 0.7175, the Aussie has hit its highest point since February. The stronger Chinese data adds to the growing case that global economic momentum has hit an inflexion point after stronger Chinese PMI data a few weeks ago. While in no way out of the woods yet, the market took the positive signs and went with it.

The day ahead has little of note for the Aussie but the Easter week does have some news to digest. The RBA kicks things off tomorrow with their Meeting Minutes and across the pond, the RBNZ is set to release their q/q CPI data. Moving forward, the RBA will also announce their all-important employment data on Thursday with European PMI and American retail sales closing out the week. Overall the short-term outlook for the Aussie remains bullish although it is meeting firm resistance at 0.7175.

Key Movers

Commodity currencies led the way over the weekend with the Euro also posting some healthy gains. The impetus for the move upwards came from China again with strong Export and Credit data adding to healthy PMI data a few weeks ago. While the shift upwards is in no conclusive of a turn-around, the market indeed ran with the news and looks to see it as a potential inflexion point in global sentiment. The Kiwi and Aussie were the best performers with the Aussie in particular outperforming. The Euro also benefiting from the news, rising 0.4% to close around 1.13. Conversely, the Japanese Yen was the weakest of the majors closing just above 112 against the Greenback. The positive sentiment also worked its way into other financial markets with the S&P500 rising by 0.7% to be within 1% of its September high and US 10-year bonds also rising 7BPS.

The week ahead looks to be action packed with a number of releases across the globe. Monday and Tuesday look to be mostly benign with only the RBA’s meeting minutes to digest but Wednesday and Thursday appear to be a bit more exciting. Wednesday kicks off in New Zealand with the RBNZ looking to release their CPI data while China is set to announce GDP data. The UK is also scheduled to release CPI numbers on Wednesday and OPEC will meet as well. Canada closes out Wednesday with their CPI and trade balance data late in the session. Thursday, ramps it up another notch with crucial Australian employment data, European PMI and US retail sales all scheduled for release before the Easter Break.

Expected Ranges

AUD/CAD: 0.9517 - 0.9593 ▲

AUD/EUR: 0.6309 - 0.6373 ▲

AUD/GBP: 0.5443 - 0.5519 ▲

AUD/NZD: 1.0592 - 1.0604 ▲

AUD/USD: 0.7127 - 0.7223 ▲