No Impact From Firmer Than Expected Retail Sales Data

AUD looks through the firmer than expected monthly domestic retail sales print, with AUD/USD last dealing a handful of pips lower on the day, around $0.7485, as an uptick in shorter dated U.S. Tsy yields applies some light pressure to the cross.

• From a technical perspective, initial support is seen at the Mar 23 low ($0.7450), with any sustained break below there opening the way towards the Mar 22 low ($0.7376). Initial resistance comes in at the 2.0% 10-DMA envelope/Mar 28 high ($0.7534/40).
• The latest Federal Budget headlines the domestic docket on Tuesday (19:30 Sydney/09:30 London), although the pre-announcements and press leaks likely limit the immediate impact of the budget when it comes to FX markets. Still, there will be some attention on the feedthrough into RBA pricing, especially given the already aggressive cash rate profile baked into ’22.