AUD on track to test YTD lows on worst CPI....>

FOREX: AUD on track to test YTD lows on worst CPI print since 2016

-AUD is comfortably the poorest performer in G10 Wednesday as Q1 CPI fell well

below expectations. The Q/Q came in flat at 0% and Y/Y at just 1.3% - both 0.2

percentage points below expectations. In response, AUD fell sharply, bottoming

out at $0.7027 and prompting bears to shift targets to the March lows of $0.7003

and the year's lowest levels of $0.6982 (excepting the flash crash lows of

$0.6741 printed Jan3). AUD implied vols have rallied in sympathy, with the 1m

measure above 7.5 points for the first time since late March.

-EUR came under pressure as Germany's IFO data disappointed, but markets clearly

remain happy to buy dips in EUR/USD following the abrupt sell-off yesterday.

Given the timing of yesterday's USD rally alongside strong US earnings, today's

reports may come under increased scrutiny. CHF is outperforming somewhat, with

the currency bouncing off multi-month lows printed yesterday.

-Data is again light, with the Bank of Canada rate decision the focus at

1500BST. Earnings from Boeing, Caterpillar, Facebook, Microsoft, Visa and AT&T

are due (among others).