Australia Focus : Tears On My Pillow
RBA “disappointed” with no rate cut although they did promise to try in the future.
This is the rosy picture courtesy of the RBA.
Meanwhile, housing is the next canary in the coalmine with mortgage numbers coming up short, slipping the most in 3 years, a relief to the central bank, no doubt should they consider a rate cut in the next round.
The AUDUSD outperformed this week, after the horror of the previous week’s performance and we are lucky to see AUDNZD recover higher, failing to break the 1.00 level.
I am not as bearish on the country yet because asset sales are continuing in earnest with NSW electricity networks up for bids, with proceeds to fund new railways, roads, schools and hospitals – all good for construction and the economy.
The Japanese are buying the most Australian bonds since 2011 in the month of Fed according to Japan’s MoF, another good thing.
Thus, as the mines continue closing, the latest being Atlas Iron Ltd (AGO AU) in Perth with both their stock and bonds affected, there will be sectors to cheer for as we go ahead that will help to buffer the global commodity malaise.
It still remains a trading market for the AUD dollar with a heavy bias for further weakness after a sharp rebound this week although I personally would think that we can see a squeeze higher in the short term. I suspect trading will be muted as we head into the G20 Finance Ministers meeting on 16-17 April.
The EURAUD has cleaned out 2 weeks of gains and looks particularly vulnerable and the AUDSGD closed the week back above 1.05.
In the longer term, I remain neutral on the currency, the equities and the bonds, seeing little meat for the risk-reward picture though not quite tears on the pillow yet.
Leaving with the indicative prices.