Intraday Market Thoughts

AUD Ahead in Early Trading, New PM For Portugal

by Adam Button
Jun 6, 2011 1:03

The Australian dollar is the early leader and the USD trails in a quiet start to this weeks trading. In Europe, Greeks continue to protest and Portugal elected a new government. The ANZ job advertisements report highlights eco data ahead of Tuesdays RBA decision.

Early moves are pointing to a modest rise in risk appetite after a fall late last week. The scope of moves has been small with AUD/USD climbing 30 pips to 1.0750 as the biggest mover.

Turmoil and change in Europe has not yet weighed on EUR as it remains very close to Fridays closing levels. In Greece, protestors took to the streets for the twelfth consecutive day with some estimates suggesting a crowd larger than 100K on Sunday. In Portugal, the Social Democrats won general elections, beating out the ruling Socialists. The result was expected and incoming PM Coelho promised to meet all the terms of the 78 billion bailout.

It will be a quiet start data-wise with the TD Securities inflation estimate at 0030 GMT and ANZ Banks job advertisements report for May at 0130 GMT. The TD estimate was at 0.3% in April and 3.6% y/y. The job ads report gained 1% in April in the twelfth consecutive monthly gain.

The Australian dollar is the early leader but liquidity will be low and gains are likely to be limited by Tuesdays RBA meeting. The latest survey shows 5 of 28 economists expecting a hike. The OIS market is pricing in only two rate hikes for the next 12 months.


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