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
