AUSTRALIA: Polls In Line With 2022 Election Signalling A Return Of Labor
The polls in the second half of April have been fairly steady with the average 2-party preferred estimated at 52.5% to 47.5% where it has been through the election campaign and close to the May 2022 result. If the surveys have accurately gauged voting intentions, then the incumbent centre-left Labor government (ALP) may retain a small majority but given that there is unlikely to be a uniform swing given the strength of local issues this time, it could easily find itself with a minority.
- Opinion poll results in the second half of April range from 50:50 (Freshwater) to 56:50 in favour of the ALP (Roy Morgan). A poll hasn’t shown the centre-right opposition LNP in front since late March (Freshwater).
- In terms of the primary vote, the average is showing the LNP on around 35% (+1pp from first half of April), ALP 34% (+2pp), Greens steady on 13%, One Nation 8% (+1pp) and others (includes green Teals) 12% (-1pp). Given standard errors around polling, these results are in line with the 2022 results.
- The Australian’s Newspoll shows that PM Albanese remains the preferred PM with 51% support with the opposition leader Dutton on 35%. Voters are net unsatisfied with both leaders with Albanese steady on -9% but Dutton down 2pp to -24%. Despite these results, only 39% of respondents believe that the government deserves to be returned but this is up 5pp on February. However, 62% think that the opposition LNP is not “ready to govern” up 7pp.
- Given that the ALP looks likely to retain government, it is worth noting that S&P warned that Australia’s AAA credit rating is threatened by the government’s large increase in off balance sheet spending. The Australian observes that it plans to increase this type of expenditure by close to $85bn over the coming 4 years.
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USDCAD TECHS: Bullish Outlook
- RES 4: 1.4700 Round number resistance
- RES 3: 1.4641 76.4% retracement of the Feb 3 - 14 bear leg
- RES 2: 1.4452/4543 High Mar 13 / 4 and a bull trigger
- RES 1: 1.4402 High Mar 20
- PRICE: 1.4292 @ 16:50 GMT Mar 28
- SUP 1: 1.4235 Low Mar 26 and a key near-term support
- SUP 2: 1.4151/4107 Low Feb 14 / 50.0% of Sep 25 - Feb 3 bull run
- SUP 3: 1.4011 Low Dec 5 ‘24
- SUP 4: 1.3944 61.8% retracement of the Sep 25 ‘24 - Feb 3 bull cycle
USDCAD traded through support at 1.4242 on Wednesday but has recovered. A return lower and clearance of this level would undermine the bull theme and instead highlight potential for a test of 1.4151, the Feb 14 low and a bear trigger. Moving average studies continue to highlight a dominant uptrend. A reversal higher would refocus attention on the bull trigger at 1.4543, the Mar 4 high. First resistance is 1.4402, the Mar 20 high.
US FISCAL: Debt Limit "Extraordinary Measures" Pick Up, But Cash Dipping Pre-Tax
Treasury data shows that there were $207B of "extraordinary measures" available to circumvent hitting the debt limit as of Wednesday Mar 26.
- That's the most since Jan 27th and up from $163B a week earlier, from a total $376B available.
- However, Treasury cash in the TGA fell to $316B as of the 26th (and was down to $280B on Thursday), meaning there were a combined $523B of resources available to avert the debt limit, the lowest since the impasse began in January (and half of the starting amount of just over $1T).
- The next couple of weeks will be very important for Treasury, as they represent the biggest tax take of the year. The Congressional Budget Office reported this week that per its estimates "if the debt limit [$36.1T] remains unchanged, the government's ability to borrow using extraordinary measures will probably be exhausted in August or September 2025." Treasury wrote to Congress this month that they would be able to provide an update on the x-date in the first half of May, after the conclusion of tax season.
AUDUSD TECHS: Remains Above Support
- RES 4: 0.6429 High Dec 12 ‘24
- RES 3: 0.6414 38.2% retracement of the Sep 30 ‘24 - Feb 3 bear leg
- RES 2: 0.6409 High Feb 21 and a bull trigger
- RES 1: 0.6391 High Mar 17 / 18
- PRICE: 0.6291 @ 16:46 GMT Mar 28
- SUP 1: 0.6258 Low Mar 21
- SUP 2: 0.6187 Low Feb 4
- SUP 3: 0.6171/6088 Low Feb 4 / 3 and a key support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
AUDUSD is unchanged. A short-term bull theme is intact and the latest move down appears corrective. Key short-term support to watch is 0.6187, the Mar 4 low. Clearance of this level would reinstate a bear threat. First support is at 0.6258, the Mar 21 low. A stronger recovery would refocus attention on 0.6409, the Feb 21 high. Clearance of this hurdle would strengthen the bull cycle and resume the uptrend that started Feb 3.
