Via a research note from ANZ economists, interest rates & AUD strategists and commodities research:

In brief:

  • Businesses' capital expenditure expectations worsened & GDP growth is likely to be modest in Q1
  • The RBA is on hold
  • The risks of a downside range break for the AUD are accumulating
  • The USD has found its feet again
  • Domestic news has taken a surprisingly negative tilt (but they do note better consumer confidence, housing strength & rise in ANZ Job Ads)
  • Regional risks are shifting from China to the rest of Asia
  • Iron ore prices to consolidate - seaborne supply slowly displaces Chinese domestic production
  • Rising oil supply to further pressure prices

BOTTOM LINE We remain structurally bearish on the AUD, targeting USD0.73 by December 2015