UK DATA: Mortgage Approvals/Private Lending Remained Solid in March

USD: Tepid optimism surrounding potential de-escalation in the Middle East is fostering a more supportive environment for risk on Wednesday, as crude futures maintain losses on the day and equity indices modestly extend their recovery. These dynamics have weighed on the US dollar, prompting a more than 1% pullback from yesterday’s cycle highs. Both a Telegraph report on the US’s pessimistic view on NATO and comments supposedly stemming from the deputy speaker of Iranian parliament, said to say that the Strait of Hormuz will never reopen, proved unable to materially dent more optimistic sentiment today

• AUD: The turnaround for risk has helped reverse the latest downswing for the Aussie, with yesterday’s bounce negating the consecutive streak of seven lower sessions that saw that saw spot extend its pullback from the March highs to ~5%. Today’s move back towards 0.6950 narrows the gap to initial firm resistance at 0.6986, the 20-day EMA.
• NZD: Kiwi has had a more modest 0.3% bounce today, but after making new lows for the year below 0.5700, downside momentum quickly stalled at the 0.57 handle, which is now firm short-term support.
• EUR: EURUSD briefly reclaimed the 1.1600 mark amid the broader dollar offer. Notably, yesterday’s price pattern is a bullish engulfing candle, which is a short-term reversal signal and if correct, suggests potential for a stronger bounce. Resistance to watch is 1.1648, the 50-day EMA.

PM Anthony Albanese has delivered a rare address to the nation, seeking to assuage public fears surrounding the impact of the war in the Middle East on Australia's fuel supplies, while also indicating that the situation is a difficult one that could get worse. Calling for citizens to "go about your business and life as normal", Albanese acknowledged at the same time that "if you're hitting the road, don't take more fuel than you need.[...] And over [the] coming weeks, if you can switch to catching the train or bus or tram to work, do so." 

• Earlier, the gov't implemented a halving of the fuel excise duty and the elimination of the road user charge for truckers for three months. This formed part of a four-stage 'fuel action plan' agreed to by state and territory premiers alongside the federal gov't earlier in the week. Australia is currently at stage two, with escalation to three or four (still a 'substantial' distance away according to the PM) involving more 'targeted action', i.e. rationing, to preserve stocks.
• The uncertainty engendered by the conflict has yet to significantly affect polling support for Albanese's centre-left Australian Labor Party (ALP). Polls show the ALP retaining leads in the primary vote and two-party preferred polling, with the centre-right Liberal/National coalition and the right-wing populist One Nation Party battling for second place.
• While the ALP's polling is not particularly strong, the split on the right could prove a major advantage, as exemplified in the 21 March South Australia state election. There, the incumbent Labor party won an additional seven seats (widening its majority) on 37.5% of the vote (a 2.5% decline). The ONP won a record 22.9% of the vote, but took just three seats as it struggled to pick up second preferences. The increase in ONP support came at the expense of the Liberals, which lost 11 seats, holding just five on 18.9% of the vote. 

Chart 1. Federal Election Opinion Polling, Primary Vote, % and 5-Poll Moving Average (Top), 2-Party Preferred Vote ALP vs. Coalition, % and 5-Poll Moving Average (Bottom Left), 2-Party Preferred Vote ALP vs. ONP, % (Bottom Right)

SFIM6 96.25/96.35/96.45c fly, bought for half in 5.5k.