· ECB and FOMC Minutes pass without major incident
· US core CPI prints downside surprise at 0.1%, lowering US Treasury yields
· EU Brexit Summit outcome awaited (9-12 month Article 50 extension expected)
· Morrison seen calling May 18th election today.
The AUD finally managed to sustain a break above important technical resistance around 0.7150, pushing on to a high 0.7175 flirting with the ‘72cents handle’ .
Potentially capping gains near term could be decent interest from Australian importers if we do creep onto that 0.72 level. We are also on guard for some potential weakness linked to the forthcoming federal election, which The Australian newspaper is telling us will be called by PM Scott Morrison today to take place on May 18th.
Elsewhere in FX, there was some volatility surrounding the ECB, US CPI and FOMC Minutes. The EUR slipped a little after ECB President Draghi re-iterated the more downbeat assessment of the Eurozone economy, with the forward guidance on rates - on hold “at least through the end of 2019” kept unchanged in what was an interim rather than policy setting meeting.
As for the impact of US events, the otherwise negative US dollar impact of weaker than expected core-US CPI print at just 0.1% was more than offset by the drop in the Euro as soon as Mr Draghi started speaking – at exactly the same time as CPI.
FOMC Minutes have come and gone without a great deal of fanfare, this being from the March meeting where the median ‘dots’ were lowered to show no change in rates this year.
As for GBP, the EU Summit is ongoing, where UK PM’s May’s request for an Article 50 extension to no later than June 30th looks to have fallen on deaf ears, the Council reportedly debating whether to offer an extension for 9 months (through end -2019) or through March 2020, replete with conditionality about the UK promising to be a good EU citizen and not opposing majority views on EU business.
In commodities, oil can continue to do no wrong despite a reported 7.03 million barrel rise in crude inventories last week as reported by the EIA, seemingly thanks to a corresponding draw in gasoline stocks of 7.71 million barrels. WTI crude is up another 49 cents to $64.47 and Brent by 99 cents to $71.60 – its highest close since 7th November last year.
· EU Brexit-related Summit outcome expected anytime
· Scott Morrison to announce an election for May18th, media suggests
· China CPI (expected 2.3% from 1.5%), PPI (expected 0.4% y/y from 0.1%)
· RBA Deputy Governor Guy Debelle speaks again today, but on `Progress on Benchmark Reform' at the ISDA 34th Annual General Meeting in Hong Kong
· France and Germany have final march CPI, US has PPI and weekly jobless claims