A snippet from ANZ on what to watch ahead for the AUD next week:
From the RBA:
- Given the RBA's more subdued bond buying and material policy divergence from peer central banks, any policy signals from either the meeting minutes or Lowe's panel discussion will carry weight.
(RBA minutes are on Tuesday May 19, 0130GMT
Lowe's is speaking on Thursday May 21, 0230GMT - part of a panel discussion)
From the US:
- Fed minutes may clarify the discussion on negative rates, which has thus far suggested it is not a preferred policy tool. Powell and Mnuchin will testify before congress on the implementation of fiscal policy. Both will likely highlight the need for more fiscal measure to avoid a prolonged depression. The path of the next fiscal package is uncertain, suggesting signs of bipartisan cooperation would be beneficial to risk sentiment
(Fed minutes on Wednesday 20 May at 1800GMT
Powell testifies Tuesday 19 May at 1400GMT)
On the AUD, ANZ is 'mildly bearish' for the week ahead and 'bearish' for the month ahead, says fair value model is at 0.64
- Improving news and some suggestions that the COVID- 19 pandemic may have reached its peak have seen the AUD outperform. The medium-term prospects for the AUD are likely to hinge on how fast activity can resume and how well economies cope with instances of the virus resurgence.
