- AUD/USD is facing the heat in extending its recovery above 0.6620 amid the risk-aversion theme.
- S&P500 futures tumbled as investors considered the Credit Suisse fiasco, after the SVB collapse, a blown out of the global banking system.
- An upbeat Australian labor market data could propel inflationary pressures again
The AUD/USD pair is facing barricades in extending its recovery move above the immediate resistance of 0.6620 in the early Asian session. The Aussie asset is sensing heat as investors are awaiting the release of the Australian Employment data before making any significant fresh position. The major was beaten down dramatically on Wednesday after the Credit Suisse fiasco, which squeezed the risk appetite of the market participants.
S&P500 futures tumbled on Wednesday as investors considered the Credit Suisse fiasco, after the Silicon Valley Bank (SVB) collapse, a blown out of the global banking system. The US Dollar Index (DXY) recovered firmly from 103.50 and challenged the elevated resistance of 105.00, portraying a risk aversion theme. Investors ran heavily for safe-haven assets to dodge sheer volatility due to which the alpha offered on US government bonds squeezed heavily. The 10-year US Treasury yields plummeted to 3.46%.
The Australian Dollar is expected to remain in action amid the release of the Employment data. As per the consensus, the Australian economy has added fresh 48.5K jobs in February vs. 11.5K lay-offs registered in January. And, the Unemployment Rate is expected to drop to 3.6% from the former release of 3.7%. Higher employment generation and a lower jobless rate are indicating an expression of higher forward earnings as upbeat demand for labor would be offset by bumper offerings from firms.
An upbeat Australian labor market data could propel the inflationary pressures again as households would be equipped with higher funds for disposal.
Apart from that, Consumer Inflation Expectations (Mar) data that demonstrate inflation projections for the next 12 months is expected to increase to 5.4% from the former release of 5.1%. An occurrence of the same would support more rates from the Reserve Bank of Australia (RBA).
The release of the downbeat US Retail Sales and lower-than-anticipated Producer Price Index (PPI) figures after inflation softening and higher Unemployment Rate have faded the expectations of bigger rates from the Federal Reserve (Fed). There is no denying the fact that Fed chair Jerome Powell could look for halting the rate-hiking spell for now considering escalating financial stress in the US economy.
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