AUSTRALIA DATA: Westpac Lead Index Pressured By Global Events
The April Westpac leading indicator was flat on the month but after falling 0.15% in March, the annualised 6-month rate eased to 0.19%, the lowest since October. This latter measure leads detrended growth by three to nine months and so suggests activity could slow in H2 but it is indicating that H1 should be stronger than late 2024. Westpac observes that the weaker index reflects recent global developments but currently through markets and sentiment.
- The RBA revised down its 2025 growth outlook in its May forecasts with Q4 2025 now expected to be 0.3pp lower than February at 2.1% due to a softer consumer recovery and heightened global uncertainty. These were significant reasons behind yesterday’s 25bp rate cut.
- Westpac expects GDP to be 1.9% y/y in Q4 2025 up from 1.3% y/y in Q4 2024 but lower than the RBA is projecting. It believes that the central bank will “take a cautious, measured approach to policy easing” and be on hold in July as it waits for Q2 CPI data on July 30.
- The largest negative contributions to the 6-month rate of the lead indicator came from equities, consumer confidence/unemployment expectations and hours worked, while US IP, the Australian yield spread and AUD commodity prices were positive.
Australia Westpac leading indicator vs real GDP growth %
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JPY: Risk Appetite Deterioration Pushes Yen Higher At Start Of Today’s Session
The yen continues to benefit from safe haven flows due to market jitters over the outlook for the global economy given increased US trade protectionism. USDJPY is down 5.2% in April after falling 0.2% to 142.18 on Friday. US equity futures have started today lower driving a strengthening of the yen with USDJPY down another 0.5% to 141.44, the lowest since September last year. The USD DXY index is down 0.4% after 0.15% on Friday.
- USDJPY fell to a low of 142.12 on Friday and today has already reached 141.50, below initial support at 141.62, which opens up 141.00. The trend condition remains bearish as the pair makes fresh cycle lows with a sequence of lower lows and lower highs. Initial resistance is at 143.59.
- EURJPY was little changed on Friday rising moderately to 162.00 off the intraday high of 162.16. In today’s risk-off move, euro continues to slightly outperform the yen leaving EURJPY up 0.1% to 162.07 after falling to 161.65 earlier and then rising to 162.21. Trend conditions remain bullish with the bull trigger at 164.19. Key support is at 158.30.
- After many markets were closed on Friday, the tone at the start of today’s trading is softer with S&P equity futures down 0.5% and Nasdaq -0.5% so far and oil prices lower with WTI -1.4% to $63.79/bbl.
- Later today Japan’s March condominium sales print. The key data this week is likely to be preliminary April Tokyo CPI data released on Friday.
AUD: AUDUSD Slightly Higher Today As Greenback Continues To Decline
Risk-sensitive currencies underperformed in holiday-impacted trading on Friday. This resulted in Aussie underperforming the G10 and weakening against the US dollar despite the DXY index falling 0.15%. AUDUSD was down 0.2% to 0.6382 off the intraday low of 0.6367. It has started today higher at +0.1% to 0.6386, despite US equity futures starting the week down, as the USD falls further (DXY -0.3%).
- AUDUSD has held onto most of its recent gains and been trading between initial support at 0.6255, 20-day EMA, and resistance at 0.6392, April 15 high. The pair is maintaining a short-term bullish tone. The break of the 50-day EMA strengthened the reversal and signalled scope for a further move higher. Key resistance is at 0.6409.
- With the euro an outperformer, AUDEUR fell 0.5% to 0.5596, but still almost 3% above the early April low. It has fallen another 0.3% at the start of today’s session to 0.5582. AUDGBP was down 0.5% to 0.4796 but slightly higher today at 0.4800.
- AUDJPY fell 0.4% to 90.65 on Friday after a low of 90.59 and is down another 0.2% to 90.44 today as the yen benefits from softer risk appetite.
- Kiwi underperformed Aussie on Friday leaving AUDNZD 0.4% higher at 1.0738 following a high of 1.0760. The pair has started today down 0.1% to 1.0727.
- Markets were closed on Friday but S&P equity futures are down 0.4% so far today and oil prices are lower with WTI -1.2% to $63.88/bbl.
- Australia and NZ are closed for holidays today and Friday, which also means there is little data this week.
GLOBAL: Monday's Holidays
Most of Asia is open today with only Australia, New Zealand and Hong Kong closed for Easter Monday. All of Europe including the UK is closed. The US and Canada are open as well as most of South America except for Brazil.
