Forex Investment and Currency Trading

Housing finance numbers for owner-occupiers fell by a large 5.9% compared to expectations for a 0.5% rise. Housing finance approvals are now 0.2% lower than at the same time last year.
Finance values for established dwellings took the brunt of the fall in finance values, down by 6.9% as low affordability and higher interest rates curbed demand.
RBA interest rate rises and the unofficial tightening by the banks have broken the back of the housing market.
The housing finance data adds to evidence of a slowing economy that has already come from falling business and consumer confidence, weak retail sales, building approvals and [...]

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USD
Event risk: Mixed messages from the chain-store data but broad recessionary conditions and 4 consecutive falls in retail jobs suggest downside risk to consensus calling for a 0.2% rise in core retail sales (Mon). The ECRI leading index hints at still more potential downside for the Empire survey (Tue) and Philly (Thur). A 7%+ fall in Feb permits warns March housing starts (Wed) could fall sharply too. The Fed’s Beige Book (Wed) is likely to be peppered with anecdotes of yet more slowing in activity while the core CPI (Wed) should bounce back from an aberrant flat outturn to [...]

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AUD
Policy rates rose for two months consecutively in February and March. But markets now price the next move in rates as down and this represents a significant danger for the AUD as it is starting from high levels supported primarily by attractive rate differentials.
Immediate rate cut risks shouldn’t be exaggerated. The RBA’s latest monetary policy statement was certainly more dovish, but that only made it broadly neutral as the previous stance had been clearly hawkish. There are, as the RBA said, some tentative signs of weakness in the Australian economy, with business and consumer sentiment both weakening and credit growth [...]

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Australia: There is a busy fortnight ahead for RBA Governor Stevens and his department, as they continue to react to changes in market and macro risk in this volatile environment. This Thursday includes a speech on “Recent Financial Developments’ to a Euromoney conference in Sydney, followed a couple of hours afterwards by the semi annual RBA semi annual Financial Stability Review.
The following week brings the RBA’s monthly rate decision on Tuesday (April 1) and Governor Stevens’ semi-annual appearance before the parliamentary economics committee on Friday (April 4). The FSR is important in light of the RBA observations about the recent tightening [...]

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