- AUD/USD has slipped sharply below 0.7400 on poor Retail Sales data from China.
- The 10-year US Treasury yields have registered a fresh three-year high of 2.88%.
- RBA’s minutes and speech from the Fed’s Powell are the key events this week.
The AUD/USD pair is experiencing a bloodbath on Easter Monday after slipping below the previous week’s low at 0.7392. The pair has surrendered more than half a percent in the Asian session and is eyeing more weakness amid an underperformance by the Chinese economic data.
China’s National Bureau of Statistics has reported the yearly Retail Sales at -3.5%, significantly lower than the market consensus of -1.6% and the previous print of 6.7%. The antipodean is a leading exporter to China and a slump in Chinese economic data does impact the Aussie dollar. However, investors have shrugged off the outperformance of solid China’s Gross Domestic Product (GDP) numbers. The yearly GDP for the first quarter of fiscal 2022 has landed at 4.8%, much higher than the estimates of 4.4% and the prior print of 4%.
Meanwhile, the broader strength in the US dollar index (DXY) has dampened the demand for aussie. The US Treasury yields are advancing sharply considering the higher inflation and tight labor market in the US economy. A collective effort of multi-decade Consumer Price Index (CPI) and a consistent full employment level below 4% is optimal for a jumbo rate hike by the Federal Reserve (Fed). The 10-year US Treasury yields have added almost 2.3% in the Asian session, at the press time and have crossed the previous week’s high.
Going forward, the speech from Fed Chair Jerome Powell will be the key event. However, investors will also focus on the release of the Reserve Bank of Australia (RBA)’s minutes on Tuesday.