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More curve flattening:
Which aided Growth a little:
Westpac has the wrap:
Event Wrap
US NFIB small business optimism fell to 97.1 (est. 97.5, prior 98.9), with supply chain constraints pushing up prices and a tight labour market being cited as factors behind the fall in the index to an 11-month low. The trade deficit in December at -USD80.7bn (est. -USD83bn, prior revised to -USD79.3bn from -USD80.3bn) made a record annual deficit of -USD859.1bn, on surging consumer goods imports.
Event Outlook
Aust: The February Westpac-MI Consumer Sentiment survey should be supported by the tentative signs of easing omicron impacts, although the shifting interest rates outlook may partially offset.
China: M2 money supply growth should remain steady in January and is ample for robust activity growth (market f/c: 9.2%). Meanwhile, new loans for January should point towards strong credit growth, setting the scene for an acceleration in investment throughout this year (market f/c: CNY3750.0bn). Note, the M2 and loan data is due 9-15 January.
Ger: Although trade surplus is expected to narrow in December, the outlook for 2022 is positive as the global recovery ensues (market f/c: €11.0bn).
US: The final estimate of December’s wholesale inventories will confirm the willingness of firms to work through supply issues and rebuild stock. The FOMC’s Bowman will speak to the Independent Community Bankers of America; meanwhile Mester will discuss the economic and policy outlook.
And Credit Suisse (SIX:CSGN) has the technicals:
AUDUSD fell sharply on Friday to suggest that the corrective recovery has already ended AUDUSD fell sharply on Friday after the rejection of its key falling 55-day average and is showing signs the corrective strength of the past week is coming to a close. Although further weakness is needed to reestablish the core downtrend, we remain with our bearish view. Support is seen at .7063 then .7033, below which should reinject additional downside momentum for a further move back lower and an eventual retest of the January lows at .6966, with a sustained break below opening the door to the 50% retracement of the entire 2020/21 uptrend at. 6758. Immediate resistance moves to .7109, but with strength above here ideally capped by the 13-day exponential moving average, seen at .7156. A continued break above would see scope for a longer consolidation phase, which we expect to be capped by the 55-day moving average at the very latest, seen at .7162. We look for a move back lower with an eventual retest of the key support at .6966.
Trend lower until the Fed breaks.
Written By:
David Llewellyn-Smith
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