Global investors yesterday seized on weak US manufacturing data and remarks from a Federal Reserve governor hinting the central bank might stop raising interest rates sooner than expected, driving US bond yields to their lowest level in more than a year.
The April trade account showed some welcome improvement, with exports up and imports marginally down. At last, and not a moment too soon. Australia may squeak through without a traditional current account deficit (CAD), and if we do I will tip my hat to Treasury and the RBA. David Uren reports that Treasury is standing by its forecast of a substantial fall in the CAD this year.
The Aussie dollar has now gone down about half-way from near 80 cents US to a more sensible near 70 cents. This will help.
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