Latest Developments: April 15 – Employment for March saw the unemployment rate fall to 5.6% from February’s 5.8%, while employment change printed at 70.7K; although, this was largely a result of the part time component as full time employment printed at -20.8K. April 6 – At their April meeting, the RBA kept the cash rate and 3yr yield target at 0.10% and asset purchases at A$100 billion as expected. The RBA added that it does not expect inflation and employment goals to be reached until 2024 at the earliest, and it will not raise rates until inflation is sustainably within the 2-3% target range. March 3 – Real GDP for Q4 printed at 3.1% Q/Q and -1.1% Y/Y versus consensus of 2.5% Q/Q and -1.8% Y/Y. Reports suggest the V-shaped recovery taking place in Australia is likely to continue as strong consumer spending and its housing boom point to a strong start in 2021. January 27 – Headline CPI for Q4 printed at 0.9% Q/Q and 0.9% Y/Y compared to Q3’s 1.6% and 0.7%, respectively. Regarding Australia’s core measures, Weighted Median CPI printed at 0.5% Q/Q and 1.4% Y/Y, while Trimmed Mean CPI printed at 0.4% Q/Q and 1.2% Y/Y. Future Sentiment Shifts: Markets have stabilised over recent months with AUD one of the primary beneficiaries of the material improvement in the risk outlook since the coronavirus outbreak caused panic last year. Risks to the market’s overall risk outlook remain high, as many countries are experiencing second waves of the coronavirus and implementing new lockdowns. However, with that said, with coronavirus vaccines now being rolled out, the future outlook is optimistic. We expect the market0s overall risk tone and performance in commodities to remain the dominant driver and influence for AUD going forward. Of course, pay close attention to global progress in containing and managing the coronavirus outbreak took.



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