Australian Treasurer Swan’s Press Conference

Australian Treasurer Swan had the following comments at a press conference:

• IMF forecasts for Australian are better than global rivals.
• IMF Report shows Australia’s fiscal position is strong.
• Government will do all it can in the way of stimulus.
• Budget will be used to support jobs.
• No guarantee jobless rate won’t reach double digit figures.
• Swan says he wont speculate on raising taxes.
• Budget will return to surplus over time.
• Right thing is to run a temporary deficit.
• Optimistic about China’s economy.

Australian 1st Quarter CPI

The Australian 1st quarter CPI was released as follows, with the AUD trading off session lows:

CPI (QoQ) - Survey:0.5%   Actual:0.1%   Prior:-0.3%

CPI (YoY) - Survey:2.8%   Actual:2.5%   Prior:3.7%

Also released was the DEWR Skilled Vacancies figure for April at -8.9% versus the prior month reading of -10.8%.

RBA Board April Meeting Minutes

The following are the highlights from the RBA’s April Meeting Minutes:

• RBA saw scope from modest rate cute in April as economy slows.
• Expects recovery in Australia demand by year-end.
• Australian banks ahead of schedule on bond funding.
• Inflation rate will decline over the medium term.
• Central Bank says jobless rate is expected to rise.
• Rate cuts supporting customer spending.
• Australian economy will shrink in 2009.
• Australian wage growth will moderate this year.
• GDP is now expected to contract in 2009 and return to growth in 2010.

This report helped the AUD regain some of its momentum as it trades off it lows, pushed lower by the bid on Yen and the USD during NY trading.

Australian PPI Data

The Australian Producer Price Index came in weaker than expected; the markets have had a limited reaction as the USD and JPY trade on session highs against their Asian and European counters.

PPI (QoQ) - Survey:0.6%   Actual: -0.4%  Prior:1.3%

PPI (YoY) - Survey:4.9%   Actual:4.0%   Prior:6.4%

Aussie Imports & Exports

The Australian Import Price Index QoQ came in lower than expectation for the 1st quarter -2.8% vs. -0.4%. The Export Price Index was also lower than expected coming in at -4.6% vs. -3.5%.

Westpac Leading Index

The Australian Westpac Leading Index for February came in weaker than the prior month at -0.3% vs. -0.2%. The prior months was also revised lower to -0.7%. The AUD has traded lower against the USD.

RBA on the Wires

The RBA Head of Financial Stability Ellis had the following comments early in Asian trading.

• Australia has more of a buffer in the event of further decline in housing price.
• He sees few Australians facing negative equity in home loans.
• Banks have withstood the global shock.
• Credit is available for “good” borrowers.
• Confidence in the financial system remains fragile.

NAB Business Confidence & Conditions

The Australian NAB Business Confidence figures came in at -13 for March, better than the prior months reading of -22. The Business Conditions were also improved from -20 for February to -17 for March. This release did little to help the Aussie as it trades off session lows

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