TD Research discusses its expectation for AU CPI tonight and expects a big upside surprise in which would reinforce support in both AUD/USD and AUD/CAD.
"Monthly headline inflation rose modestly in the Mar qtr, +0.5%/q monthly average and +0.4%/q mid-month of the quarter. The Inflation Gauge measure tends to slightly underestimate headline CPI for Q1, so we stay with 'top down' headline CPI at +0.5%/q and 1.8%/y. Consensus is weaker at +0.2%/q,' TD projects.
"An upside surprise to give the AUD the briefest of tailwinds towards $US0.72, a level that hasn't broken since the RBA switched to 'balanced' risks. Expect sellers to emerge ahead of the ANZAC Day holiday the next day," TD adds.