The latest opinion poll ahead of the Australian federal election (Sat 21 May), suggests the Labor Party is on track to win 80 seats, which would give it a majority of 5 seats in parliament.
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Weakness in crude oil prices spilled over into AUD/USD, which extended losses to a three-week low on Monday.
Late on Monday, CBA noted that their “internal household spending card data for the week ending 8 April signals continuing strength in the household sector. In the fortnight to 8 April, spending growth in all states rose indicating that higher COVID caseloads have not materially dampened overall spending. In the fortnight, South Australia recorded the strongest pick up with all other states also showing spending has significant momentum. The strength across the national household sector is coinciding with an exceptionally tight labour market, providing further evidence that the economy is running hot. Inflationary pressures are accumulating which could be contributing to the increased spending. However, the key takeaway at present is the continued strength of the household sector. Consumer concerns about inflation and upcoming official interest rate hikes do not seem to be translating into dampened spending at present, though it is a risk in the medium term.”
The futures curve twist steepened in post-Sydney trade, aided by the dynamic observed in U.S. Tsys, which leaves YM +0.5 & XM -2.0 shortly after Tuesday’s Sydney open, operating around late overnight levels.