Australian Dollar Outlook - 11/11/2011
Bell FX Currency Outlook:
The Australian dollar has opened this morning fairly unchanged at USD1.0150 as worries over Europe's ability to handle its debt crisis abated somewhat.
Australia: Equity markets pushed higher with the S&P500 adding 0.6% rising to 1,236.69 and the Dow Jones adding 0.8% to 11,877. Italian bond
yields edged back below 7% as the ECB stepped in and purchased the securities with a 12 month bill auction also successful.
Yesterday saw the release of China's trade data which came in below market expectations, with export growth slowing to 15.9% y/y down from Septembers 17.1%. While the exports disappointed, the imports surprised on the upside, gaining 28.7% compared with Septembers 20.9%. As
China's major trading partner Europe slips into a mild recession, it is expected that export growth will continue to fall. The release of Australia's
unemployment data yesterday saw a surprise fall in the underlying unemployment rate to 5.2%, down from 5.3% last month, and jobs growth
of 10.1k.
With a very quiet day data wise, we expect that the AUD will trade in a fairly tight range, taking direction from our local equity markets.
Majors: Markets were buoyed overnight by progress in Greece and Italy on forming a new a new government with hopes Italian and Greek lawmakers will act swiftly to implement austerity measures and economic reforms. Former ECB Vice President Lucas Papademos has been appointed to lead a unity government in Greece; whilst former European Commissioner Mario Monti could be the contender to replace outgoing Berlusconi in Italy.
Stocks tumbled yesterday after Berlusconi said he would not resign till austerity measures were past. A statement from S&P affirming Frances AAA credit rating also lifted equities, saying that a "technical error" was to blame for an earlier message suggesting a downgrade. In the US, jobless claims have seen the lowest reading since early April falling to 390k below the 400k seen last week.
Federal Reserve Chairman Ben Bernanke said the central bank is concentrating "intently" on reducing unemployment and is anticipating inflation to stay under control for the "foreseeable future".
Economic Calendar
11 NOV UK PPI Input / Output OCT
US Uni of Michigan Confidence NOV
EU ECB's Gonzalez Paramo speaks in Madrid