A$ Outperforms On The Day

The A$ has outperformed broader USD strength seen elsewhere. AUD/USD is nearly back to unchanged on the day, just below 0.7200 after earlier dipping under 0.7170.

• The currency has received several supports. Q1 GDP estimates have firmed after today's partial prints. This follows stronger inventories/public spending data, which offset a slightly larger drag from net exports.
• The upward revisions we have seen from sell-side analysts are in the range of 0.6-1.1% in terms of QoQ GDP growth. Note the Bloomberg consensus sits at 0.7% for tomorrow's print.
• Better than expected China PMIs have also helped at the margin. This suggests the worst of the downturn may now be behind us.
• The China Cabinet also issued a series of policies to stabilize the economy. Infrastructure investment will be stepped up, while the authorities will continue to push actual loan rates down.
• Whilst much of the focus has been on the continued rise in oil, Iron ore remains close to $137/tonne, down from the recent highs, but well above the sub-$125/tonne levels from a few weeks ago.
• All the majors are down close to 0.30% against the USD. AUD/NZD is close to 1.1000, but hasn't been able to meaningfully break above this level yet.