AUD Steady Ahead of Today's Chinese Production Numbers
AUD
The AUD was trading within tight ranges if not marginally lower against the majors. US equities continued their push higher overnight with the NASDAQ rising +0.9%, and the S&P 500 finishing +0.5% higher. Despite the AUD’s recent appetite for stronger US equities, the gains in Equities seen overnight weren’t enough to push the AUD higher. Perhaps lagging Commodities dampened the mood with Gold trading flat, and Iron Ore marginally better at +0.1%. Today we’ll see some activity numbers from key customer China with headline NBS Manufacturing PMI expected to ease from 50.4 to 50.2 whereas the Non-Manufacturing PMI could decline from 53.3 to 52.8. While downbeat forecasts signal further hardships for the AUD, anything above expectations could give the AUD a boost. Domestically, there’s some second-tier data released today, with some second quarter current account data and Building Approvals which shouldn’t move markets.
USD
The AUDUSD is trading sideways at 0.7294. The AUD has given back some of the headway made since the Jackson Hole on Friday that failed to support the greenback on account of a dovish speech from the Federal Reserve's chairman. Little in the way of major US data yesterday, July Pending Home Sales falling by 1.8% MoM and 9.5% YoY, coming in worse than expectations of +0.3% and -8.8% respectively. Released shortly afterwards, the Dallas Fed Manufacturing Activity Index for August fell to 9.0, down from 27.3 and worse than expectations of 23.0. There was little reaction from markets, likely as they are waiting in anticipation of both US PMIs tomorrow and the official Non-farm Employment report at the end of the week.
EUR
The AUDEUR trading a few ticks lower to sit at 0.6181 this morning. European equity markets were largely unchanged with the FTSE, DAX, and CAC trading just higher gaining +0.3%, +0.2%, and +0.1% respectively. On the data front, Spanish Retail Sales came in at annual growth rate of 0.1% in July, short of the forecast of 0.6%. EZ economic confidence slowed to 117.5 in August, down from 119 in June but was largely ignored with little reaction to the data. The same could be said for German CPI for August which was flat compared to expectations of 0.1% while the YoY result was 3.9% as expected. There’s a data dump out of Europe today with some French and Italian Prelim CPI data as well as German Unemployment Change booked in for this afternoon.
GBP
The AUDGBP was trading just off the mark to sit at 0.53 flat at time of writing. The UK has a very quiet week ahead, and it started off with a bank holiday on Monday, hence the calm in markets as the Britts soak up their last rays of summer sunshine. There is less significant data coming out of the UK today, but direction is more likely to be taken from health conditions as figures released on Sunday show another 33K+ people in Britain tested positive for COVID-19. The country also reported 61 COVID-related deaths, fuelling worries about the fast-spreading Delta variant of the coronavirus.
NZD
The AUDNZD lost some ground over night to trade at 1.0421 this morning. It’s been a sleepy start to the week for our cross-Tasman counterparts with little in the way of data to start the week. Jacinda Ardern’s cautious optimism, despite extending the Alert Level 4 status in Auckland for two more weeks, has sobered market sentiment. Uncertainty surrounding the Reserve Bank of New Zealand’s (RBNZ) next moves are also restricting NZD. The Kiwis will also be taking impetus from Chinese data released today, with some ANZ Business Confidence data released at the same time. Could see some movement from 11am.