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It’s a big day for the AUD, with March employment data at 11:30am (AEST) and China trade balance (Reuters expects this at 12pm AEST). In terms of jobs, the market expects 2500 jobs to be created, with a range of +25,000 to -20,000 from economists. Earlier in the month we saw a strong Korean export print (+5.2%) and this has generally been a been a good guide to China’s export numbers, which in turn are expected to stage a strong rebound after big falls last month. AUD/USD is looking a touch overbought at present, so we could see some modest profit-taking going into the data flow.
The emerging market currencies have been doing very nicely of late and the Korean won is looking ripe for further downside on the daily chart. Strong support was seen at around the 1050 level, but the pair burst through this level yesterday and would be eyeing 1000 in earnest. There is talk of a move in the coming weeks to 950 and while the Bank of Korea have been trying its best to curb the strength in the KRW, strong foreign inflows have overruled FX intervention. There are many reasons for foreign money managers to hold Korean bonds and with stability in China and the CNY, the KRW has a strong platform to progress. One to keep on the radar especially with the Korean central bank meeting this afternoon (rates expected to stay on hold).
Financials (ASX financial sector)
While BHP has been a strong backbone behind the moves in the ASX 200 of late, the financial sector is also seeing good strength. Rather than pick one bank, have a look at the financial sector (quoted ‘Financials’ on IG’s trading platform). A break out of the October 29 high of 6121.7 could be on the cards today, given the leads, a close above this pivot could bring out momentum focused traders.
Consumer Disc (ASX Consumer discretionary sector)
Again like the financial sector, rather than pick one stock I am looking at a strong theme developing. With DJS getting a A$4.00 bid the whole sector yesterday came alive. When Woolworths are happy to pay an all-cash bid for the retailor at 24x consensus earnings this will always put a bid in the rest of the sector. 1838 is the 50% retracement of the February to March rally and a break of here today (which seems very likely) should see the market target 1868.