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Gilt/Bund spread breaks above the double top

OUTLOOK

Weekly Claims, Retail Sales, TIC Flows

AUD

{AU} AUD: Westpac note that the "Aussie slipped about 2 cents vs. USD into early February as commodity prices faltered and equity volatility rose. But it has recovered be close to its strongest levels since March 2018. The equity surge following the U.S. elections, optimism over Covid-19 vaccines, and elevated iron ore prices have all played a role. Since the USD typically underperforms in global economic upswings, dips in AUD/USD should be shallow. However, there are some brakes on further gains near term, including upward pressure on U.S. Treasury yields following the Democrats' recapturing of Senate control, the RBA's haste to announce another A$100bn QE program, ongoing pain for Australia's tourism and education exports, and tensions with China which will hurt both investment and exports. Our end-March forecast for AUD/USD is $0.78."

MNI London Bureau | +44 0203-865-3809 | anthony.barton@marketnews.com