AUD getting hit and with the UK MPC Press Conference today, another high-yielder is likely to get hit as well.

Overnight News Bullets

• Euro-Zone Budget Deficit/GDP Ratio (Dec 31) out at -1.6% as expected.

• Euro-Zone Government Debt/GDP Ratio (Dec 31) out at 69.0% vs. 70.8% previously.

• Japanese Corp Service Price YoY (Mar) out at 0.6% vs. 0.2% expected.

• Australian Consumer Prices QoQ (1Q) out at 0.1% vs. 0.6% expected.

• Australian Consumer Prices YoY (1Q) out at 2.4% vs. 3.0% expected.

• Australian CPI Market Prices QoQ (1Q) out at 0.3% vs. 0.6% expected.

• Australian RBA Trimmed Mean QoQ (1Q) out at 0.5% vs. 0.6% expected.

• Australian RBA Trimmed Mean YoY (1Q) out at 2.7% vs. 2.8% expected.

• Australian RBA Weigthed Median QoQ (1Q) out at 0.5% vs. 0.7% expected.

• Australian RBA Weighted Median YoY (1Q) out at 2.7% vs. 2.9% expected.

Markets

• FX: AUD getting creamed after weak CPI figures. JPY getting some support from CGP.

• Fixed Income: Slightly higher, but still in the ranges from the last two weeks.

• Stocks: US making new highs, but getting rejected near trend channel.

• Commodities: Precious  metals slightly lower. Crude oil rallying two bucks.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• AUD being hit by massive expectations failure wrt. the CPI figures. At the same time, the JPY could get some support from the S&P debt grading yesterday (from AA- to AA, first increase since 1975 for Japan) and the biggest increase in Corporate Goods Prices since 1998.

• Stocks are trading at the upper band of their bull channels, giving a convincing risk-reward for short positions.

• Fixed Income at risk, going into the GDP figures on Friday. Our Index of Weekly Economic Indicators shows massive strength in Q1. Thus, there is room for another massive expectations failure, which could hurt fixed income (at least temporarily).

• UK MPC Press Conference today is very likely to have a bearisk impact on GBP, since they knew the high CPI figures and didn??™t hike at the last meeting. A defense of this non-action must be based on some bearish knowledge.

FX

GBPJPY likely to follow AUDJPY lower