A$1 million ($909,000) first prize in the Wilberforce Award, is seen during a publicity event in Sydney August 11, 2010.
IN PHOTO: A$1 million ($909,000) first prize in the Wilberforce Award, is seen during a publicity event in Sydney August 11, 2010. The Wilberforce Award, being offered by a businessman, Dick Smith, will go to an Australian under the age of 30 who can, "in the words of organizers, show leadership in communicating an alternative to our population and consumption growth-obsessed economy". REUTERS/Daniel Munoz

Bell FX Currency Outlook: The Australian Dollar is around the same level as this time yesterday following a mixed session offshore. Today’s CPI release should provide some direction.

Australia: Yesterday the AUD was a little weaker following the release of the minutes from the RBA April board meeting. In combination with RBA Governor Glenn Stevens’ on Monday night, the minutes suggested that the RBA continues to hold an easing bias, but remains cautious about further rate cuts. The Bank is becoming even more negative about the outlook for investment and now thinks that non-mining investment is “likely to remain subdued, and could even decline, over the next year or so”. Overnight the AUD made some gains during the European session but has ended the day broadly unchanged, currently around 0.7715. Today’s CPI data will be the major focus today, as the market is forecasting 0.1% q/q and 1.3% y/y, with fuel prices subtracting 0.5ppt. In yesterday’s minutes the RBA made a specific mention of waiting for today’s inflation data. A higher than expected underlying print would reduce market pricing for a rate cut in May. On the flipside, a lower print for underlying inflation in Q1 will give the RBA even greater confidence that the high Q4 print was an aberration and that inflation will remain contained.

Majors: The USD shuffled between small losses and gains against the EUR and other rivals overnight as investors remained uncertain about the direction of the U.S. economy and the timing of an expected rise in borrowing costs. The German ZEW survey was generally upbeat in April, with the current situation component rising to 70.2 (mkt: 56.5) from 55.1 – the highest level since 2011. However, the expectations component weakened marginally to 53.3 from 54.8. The EUR did come under some pressure earlier in the session amid reports that ECB staff proposed increasing the haircut imposed on the security that Greek banks offer as collateral in return for emergency funding. Also in the news, EU Commission President Juncker said he is “not happy at all” with the progress on Greece talks, but that it is inconceivable to let Greece fall. Tonight the Bank of England minutes, European consumer confidence and US home sales are the key releases.

Economic Calendar 22 APR

  • AU CPI QoQ/YoY
  • UK Bank of England Minutes
  • US Existing Home Sales / MoM
  • EC Consumer Confidence

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