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    EMgist_admin
    Jan 08, 2018
      ·  Edited: Jan 08, 2018

    AUD impressive year-end rally = Opp'ty to re-engage shorts?

    in EMgist Live

    AUD staged an impressive 4.4% rally over the past 1mth as an expected reflation on the back of US GOP tax cuts put commodities (and commodity currencies) back in favor...



    ...led by NZD, AUD and CAD.


    6 comments
    0
    EMgist_admin
    Jan 08, 2018

    Economic and inflation surprises improved during December. Citi Economic Surprised moved towards par while CPI surprise marginally moved less negative:



    ...Economic Surprise Index move less negative was helped by stronger-than-expected home loans, consumer confidence, labor data and private sector credit:




    ...Thought detracted last Friday by weak trade balance. This morning, we have building approvals where risks are to the downside. Retails are due this Thursday.


    0
    EMgist_admin
    Jan 09, 2018

    Interestingly, in divergence vs price action, IMM futures traders faded the commodity-reflation rally - moving to a net short position over the past month:



    ...to the largest net AUD short position since early 2016:


    0
    EMgist_admin
    Jan 09, 2018

    AUD rally largely associated with commodity-reflation. China commodity basket index vs AUD:



    0
    EMgist_admin
    Jan 09, 2018

    AUD looks rich vs AUD-USD rate spreads (below = 2yr ACGB-UST, 10yr ACGB-UST, 1yr forward RBA-Fed):





    0
    EMgist_admin
    Jan 09, 2018

    Strong building approvals number this morning and AUD is up 0.1% in knee-jerk response. Reaction appears muted given such a large beat:

    • Building approvals climbed 11.7% m/m in November, compared with a median economist estimate of a 1.3% decline. The forecasts ranged from +2.0% to -4.0%

    • Yield on Australia’s 3-year govt note adds 2bps to 2.093%


    Market focus should move on to Retail sales this Thursday.

    0
    EMgist_admin
    Jan 11, 2018

    Australia Nov. Retail Sales Rise 1.2% M/m; Est. +0.4%, Cons 0.4%. Led by household goods +4.5%, apparel 1.6% while dept stores detracted -1.1%.

    AUD +0.4%, could test 0.7874 resistance (5 Jan high).



    0
    6 comments
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