Raft of data will set tone for AUD

Four markets in focus today: AUD/USD, USD/JPY, Twitter and Echo Entertainment.

AUD/USD

AUD/USD back in focus today ahead of trade balance, retail sales and NAB business confidence which are all due out. The pair is currently just holding onto the 0.89 level after that strong bounce on Tuesday. Further signs that the economy is on the mend could see the pair squeeze even higher heading into tomorrow’s monetary policy statement. Retail sales expected at 0.5%, previous reading was up 0.7%. Trade balance expected to show a $200 million deficit. Should this data disappoint, some traders could use it as an opportunity to initiate fresh shorts.

USD/JPY

Price action in the pair has been choppy over the past few sessions and is now shaping up to be very interesting heading into the business end of the week. On the JPY front, today we have weekly fund flows data which generally gives a good indication of whether the desired outflows effect is in play. Meanwhile on the USD front, data ramps up with trade balance, unemployment claims, productivity and labour costs data all due out. This will help shape up sentiment heading into tomorrow’s non-farm payrolls. Any signs of continuing outflows for Japan and strength in the US could finally see USD/JPY recover.

Twitter

The social media giant’s shares dropped around 18% from its highs after a disappointing report. Slower user growth and a wider-than-expected net loss saw the stock drop sharply in after-hours trade. Investors will want to see evidence that the company can monetise its significant smartphone and tablet usage through advertising effectively. Having been trading at a significant premium, near-term pressure could remain on the stock.  

Echo Entertainment

EGP shares dropped yesterday on the back of its results. However, there is a glimmer of hope as the results have been well received by some brokers. Deutsche Bank has upgraded it to Buy (from Hold) and Credit Suisse has raised it to Outperform (from Neutral). Yesterday the stock actually dropped to a record low so perhaps this might prompt some bargain hunting on the stock. However, traders might be looking to sell it into strength with a firm downtrend in place.

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