Chinese Data Will Get The Week Started

AUD

A positive end to the week saw the AUD advance further across most major currency pairs. Asian Equities finished Friday’s session higher with the Nikkei rallying 1.8%, and the Shanghai Comp was up 0.7%. The ASX was up 0.7% with Material and Tech stocks leading the gains. Commodities were down across the board with Gold, Silver and Iron Ore all taking a loss over the weekend. An improved risk sentiment saw the AUD strengthen after a relaxation COVID restrictions in Sydney. The decision comes as the NSW state was set to reach 80% double-vaccination dose rate on Saturday. Furthermore, the Chinese central bank has finally assured markets that the Evergrande risk to the financial system are controllable and unlikely to spread which eased concerns about a chain reaction affecting the financial sectors globally. Little in the way of Aussie data today however a potentially busier day ahead with New Zealand inflation data (see NZ Section) and important Chinese Retail Sales and GDP figures today at 1pm.

USD

The recent AUD rally against the greenback ran out of steam on Friday evening, having traded as high as 0.7440 and currently trading at a rate of 0.7416 at the time of writing. US Equities edged higher over the weekend with the Dow Jones up 1.1%, the S&P500 gaining 0.7%, while the Nasdaq up 0.5%. US 10-Year yields advanced to 1.57% while Crude Oil finished the session up 1.2% higher at $82.30 a barrel. In the event, US Retail Sales for September rose 0.7% MoM to easily beat expectations of a 0.2% contraction with core measures also all easily surpassing expectations. Adding to the beat were positive revisions to August numbers. Also released was October Empire Manufacturing which fell from 34.3 to 19.8 to come in worse than expectations of 25.0. Additionally, the University of Michigan Consumer Sentiment index came in at 71.4, lower than the expected 72.8 forecast, the second lowest reading since 2011 as consumers grew more worried about the economic outlook. A lack of local data on the docket with only the US Industrial production and today’s Chinese data being of note.

EUR

The AUDEUR pair gained some follow-through traction on Friday to trade at 0.6397 this morning. European Equities climbed to the highest level seen in five weeks with the DAX up 0.8% and the CAC gaining 0.6%. On the economic data front, The European Central Bank will continue aiding the euro-area economy as the fallout from the pandemic lingers, President Christine Lagarde said at an International Monetary Fund event on Saturday. Little reaction to the chatter with traders likely inclined to note that the central bank is already preparing to transition to post-pandemic stimulus. French consumer price inflation came in at negative 0.2% month-on-month in September. On an annual basis, it was 2.7% higher and Spain’s annual rate of inflation picked up from 3.3% to 4.0% which was in line with prelim figures. The Harmonized Index for Consumer Prices rose by 4.0%, year-on-year, which was also in line with prelim figures. In August, the Harmonized Index for Consumer Prices had risen by 3.3%. NO EUR data due tonight and is relatively light for the week ahead leading up to Friday night's Services and Manufacturing PMIs.

GBP

The AUDGBP pair bucked the trend to make a minor loss on Friday, currently trading at a rate of 0.5402 at the time of writing. The London Benchmark FTSE 100 closed 26 points higher at 7,234, that takes its gains this week to 2%, the best week since pre-pandemic times. The index has now recovered most, but not all of the losses since February 2020. Headlines hitting the wires over the weekend reported that a UK Conservative MP has been stabbed while meeting constituents in his electorate with later headlines confirming that he had died from his injuries.  Little in the way of macroeconomic data ahead with local UK HPI data and BoE Governor Bailey speak being the only note-worthy mentions.

NZD

The AUDNZD followed suit to trade at a loss on Friday with the pair currently trading at a rate of 1.04753 at the time of writing. The AUDNZD pair extended the previous week’s losses this morning following upbeat higher NZ Consumer Inflation Data (CPI) which comes at 2.2% in September, beating market expectations of 1.4 %, whereas the Business NZ performance of Service Index (PSI) reads at 46.9 in September as compared to the 35.6 in the previous month. However, the downside seems limited as the policymakers are considering tightening restrictions in Auckland again due to rising covid infections. A lack of local data will see traders focus on today's Chinese Retail Sales and GDP figures at 1PM.