An extract from ANZ on what to watch for AUD next week:
From the RBA:
- With the RBA’s more moderate bond buying and the significant policy divergence of the counterpart central banks, any policy signals from the Lowe meeting minutes or round table will carry weight.
(RBA minutes are Tuesday May 19, 0130GMT
Lowe’s will speak on Thursday May 21, 0230GMT – part of a round table)
The United States:
- Fed minutes could clarify the discussion of negative rates, which has so far suggested that it was not a preferred policy tool. Powell and Mnuchin will testify before the congress on the implementation of fiscal policy. Both will likely highlight the need for more tax measures to avoid a prolonged depression. The trajectory of the next budget package is uncertain, suggesting that signs of bipartite cooperation would be beneficial for the feeling of risk
(Fed report from Wednesday May 20 at 1800GMT
Powell testifies Tuesday May 19 at 1400GMT)
On the AUD, ANZ is “slightly bearish” for the coming week and “bearish” for the coming month, according to the fair value model at 0.64
- Improved news and some suggestions that the COVID-19 pandemic may have peaked resulted in an AUD outperformance. The medium-term prospects for AUD will likely depend on the speed with which activity can resume and the ability of economies to cope with cases of resurgence of the virus.