Eurozone PMIs Tonight to Reveal Trajectory of Recovery
AUD
It has been a mixed night of trading for the AUD, as the above open rates show. After a rather uneventful local session yesterday, Fed Chair Powell made statements overnight revealing a cooling off on his stance regarding inflationary pressures and the need to start talking about tapering (see more in AUDUSD below), which helped AUD stem some of the bleeding over the last few weeks. On the commodities front, Iron Ore lost out -1.0% whilst Gold put a halt on its recent downhill run to remain flat. What might have contributed to the losses in Iron Ore could be Beijing’s plans to step up an investigation into commodity prices, which dented commodity sentiment on the Dalian Commodity Exchange as Benchmark Iron Ore Futures in China tumbled for a second straight session on Tuesday, narrowing their gains to 30% so far in 2021 from more than 50% earlier. Another quieter day on the domestic data calendar, with just RBA Assistant Governor, Luci Ellis speaking just after lunch.
USD
The AUDUSD has shown some resilience to remain at similar levels seen yesterday, currently trading at 0.7552. What might have prevented the pair from slipping further was a step-back from the hawkish rhetoric out of the Federal Reserve or its members like we saw last week. Fed Chairman Powell reiterated his stance regarding inflationary pressures being transitory, and commented that upcoming employment reports are likely to be strong though there was still a long way to go on the jobs recovery. Other Fed member commentary coming from Mester and Daly who both noted the improving outlook for the US economy though it was not yet the time to begin tapering. Looking ahead, the US will release some flash Manufacturing and Service PMIs at 11:30 tonight.
EUR
The AUDEUR has remained subdued overnight with markets looking to this evening's data dump for inspiration, trading at 0.6323 this morning. Overnight the European Commission reported that the Consumer Confidence Index in the eurozone edged higher to -3.3 in June's preliminary reading, up from -5.1 in May, but missing the market consensus of -3. European Equities are quiet with the FTSE, DAX and CAC all taking very minor gains, up +0.4%, +0.2%, and +0.1% respectively, It’s a busy day ahead for the markets, with preliminary private sector PMI numbers for June due out tonight. Services PMIs are very likely to hit a new pandemic high, mirroring the sentiment boost already seen several months ago in the US.
GBP
The AUDGBP trading sideways to remain at the 0.5412 mark this morning. Some optimism for the Brits, with Health Minister Matt Hancock saying on Tuesday that the COVID-19 data looks encouraging and currently suggests England's lockdown can fully end on July 19 as planned, because a recent rise in cases is not resulting in deaths. The UK will join the rest of Europe in releasing some Flash PMIs this evening before the key data event of the week tomorrow, with the Bank of England Monetary Policy Commentary coming out later tomorrow night.
NZD
The AUDNZD taking some minor losses to trade 1.0706 at time of writing. New Zealand’s Westpac-McDermott Miller Consumer Confidence Index rose 107.1 in Q2, down from 105.2 in the previous quarter, but the result failed to dent the NZD. New Zealand's quarantine-free travel bubble with NSW is being paused on the back of the state's growing coronavirus outbreak. It’s been a quiet week on the Macroeconomic data calendar for the Kiwis and that’s likely to continue as currency markets look overseas for fresh impetus for movement.