Open trading account
Good Morning All;the Week Ahead: The AUD has continued its retreat from its recent highs to open the week at 0.7830. The RBA will be pleased with this move ahead of next week's monetary policy meeting. The AUD came lower following the strengthening of the greenback in late trade last week following Fed Chair Yellen's contention that there would still likely be an interest rate rise this year. In the absence of local Australian data to start the week and bank holidays in the US (Memorial Day) and Europe it is likely that the AUD could continue to trade in a relatively narrow range waiting for offshore direction although Asian markets could be off to an exciting start following the European news over the weekend. There is a speech scheduled for RBA Deputy Governor Lowe on Wednesday before construction data is released. New home sales figures on Friday will again be closely watched in the context of next week's RBA meeting and following the cut in rates earlier this month. Across the Tasman in New Zealand it will be an extremely quiet data week however the trade balance figure on Tuesday will be heavily anticipated. The strength of the kiwi coupled with the continued decline of dairy prices for the fifth consecutive GlobalDairyTrade auction could make for an interesting result. The New Zealand budget was released last week and took many by surprise with a deficit forecast for the year ahead and a marginal surplus targeted for the following year. Significant changes to the budget have had many describing it as a "Robin Hood" style budget that places additional burden on the wealthy and benefiting the poorer segments of the community. Measures include the increase of airport taxes and removal of bonus payments into the Kiwisaver scheme. Housing related measures - particularly Auckland focused - were again heavily discussed in the past week with the ability to access funds for deposits a significant talking point as well as deposit ratios. The relative strength of the New Zealand economy has seen an increase in the number of Australians looking to move permanently across the ditch in what is becoming a reversal of the trend built up over many decades.There is a raft of US data following the bank holiday on Monday with a speech from Fed Member Fischer one of the first items up. This could be an interesting start to the week following on from Fed Chair Yellen's speech on Friday that highlighted that the Fed will not be embarking upon a pre-determined course of action and will continue to act in response to data as it emerges. Durable goods figures are due out on Tuesday and are anticipated to show a moderate performance at best. Unemployment claims data on Thursday will however be closely watched with unemployment rate coming down to 5.4% in April, a level that still hasn't fully taken up the excess capacity in the labour market. CPI data has shown that it is tracking towards the Fed's target but still needs to strengthen further. GDP figures on Friday will round out the week ahead of consumer sentiment and inflation expectations in the early hours of Saturday morning.The looming default by Greece on the next round of International Monetary Fund loan repayments is providing a real headache in European markets. Once Asian markets open on Monday we are expecting the EUR to continue its decline following the sensational headlines by the Greek Interior Minister that they have run out of money to make the payments. The ongoing Greek situation is likely to overshadow other European events and data during the week and will also no doubt feature heavily at the G7 meetings taking place this week. European consumer spending and retail sales data will be keenly anticipated later in the week but could fade in importance following the ECB financial stability report on Wednesday and continued fallout from the Greek situation. In the UK GDP estimates are scheduled alongside house price and mortgage figures and business investment data. The recent general election result will provide an interesting framework to consider this latest data. It has also emerged that the Bank of England has commissioned research into a possible exit from the EU. Whilst this development appears to have surprised many, it would in reality be more surprising had it emerged that there had been no consideration as to the possibility of an exit.Japanese data will dominate Asian markets this week with the lack of any data scheduled in China. We are still expecting Asian markets to provide most of the early action this week in the light of the stunning Greek headlines with European and US bank holidays on Monday.Regards.
