AUD Stronger Across the Board
AUD
The AUD pushed higher to make a gain across most major currency pairs overnight. Asian Equities were overwhelmingly higher on Thursday with the Hang Seng the star performer with gains of 3.1%, Shanghai Comp up 0.9% while the Nikkei posted a minor gain of 0.5%. The ASX closed the session with gains of 0.7%, in a broad rally that included all sectors besides energy. Commodities were mixed if not subdued with Gold down slightly (-0.1%) and Iron Ore up 0.7%. In the event, yesterday the The September AIG Performance of Services Index printed at 45.7, slightly better than the previous 45.6 but still in contraction territory. On the docket today, the RBA will publish the Financial Stability Review Report which provides the Bank’s assessment of the current conditions of potential risks and financial stability, while the US will publish its monthly employment figures.
USD
The AUDUSD outperformed to re-test recent highs of 0.7320’s before coming back to trade at a rate of 0.7310. US Equities were firmer overnight after progress was made on the debt ceiling issue. The Nasdaq gaining 1.5% while both the S&P 500 and the Dow Jones rallied 1.1%. US 10-year yields ticked higher to 1.57% and Oil posted gains of 1.4% slightly below 80$ a barrel. In the event, US weekly jobless claims data was better than expected with initial claims falling from 364k to 326k to beat estimates of 348k while continuing claims fell to 2.714mio, down from 2.811mio and better than estimates of 2.762mio. Senate Majority Leader Schumer was reported to have announced an agreement to extend the government’s borrowing authority into December, temporarily averting an unprecedented federal default that experts say would have devastated the economy. To the data, tonight the US will publish its monthly Nonfarm Payroll report. The country is expected to have added 490K new jobs in September, while the Unemployment Rate is foreseen at 5.1%, improved from 5.2% in the previous month.
EUR
The AUDEUR pair gained momentum and pushed higher overnight, trading at a rate of 0.6324 at the time of writing. European Equities rallied higher overnight with the DAX posting gains of 1.9% and the CAC was up 1.6%. In early data, German Industrial production fell by 4% in August bs a forecast of -0.5%. %. Italian retail sales for August grew by 0.4% (0.3% expected). Overnight we saw the release of the ECB Minutes, which revealed concerns over the Eurozone Inflation forecasts. Some ECB policymakers have argued it is underestimating future inflation, warned about the risk of a ‘regime shift’ in prices and pushed for a bigger cut in asset purchases than it ultimately decided at its meeting last month. There is no data on the macroeconomic calendar this evening.
GBP
The AUDGBP pair followed suit to make a gain overnight, trading at a rate of 0.5370 at the time of writing. The London Benchmark FTSE 100 closes in the green amid positive data, up 82 points higher for a 1.17% gain. Overnight, the BoE’s new chief economist Huw Pill has said pricing pressures are proving more long lasting than had been expected. “High level of inflation could persist for longer than expected”, suggesting he agrees with the more hawkish elements of the Monetary Policy Committee. In it’s September Policy statement, the BoE said it expected consumer price inflation to reach 4 per cent later in the year, well above the 2 per cent bank target, and to remain high for some time. Little in the way of data for the Pound with the FPC statement and BoE quarterly bulletin being the only mentions.
NZD
The AUDNZD pair advanced higher to make 2-month highs, currently trading at a rate of 1.0553 at the time of writing. There's been a lack of meaningful Kiwi economic data, the move higher attributable generally to broader Aussie dollar strength. There is no data headed into the weekend with investors likely keeping their focus on tonight's Nonfarm payroll data in the US.