Thursday's Local Employment Report Looming Large
AUD
The AUD ended the week off relatively subdued against most major currency pairs. Asian Equities staged a broad-based recovery over the weekend with the Nikkei up a significant gain of 1.2% and Shanghai Comp up 0.3% respectively. The ASX advanced 0.5% on Friday however despite late gains had ended the week down 1.5%, following a heavy sell-off end on Thursday. Commodities had a mixed session with Iron Ore rallying 2.0% while Silver was down -1.2% and Gold had posted minor losses of 0.4%. Looking ahead, interest is set to be dominated by the inflation and retail sales data from the US. While in local data, it's a quiet start to the week, investors will focus on the RBA governor Lowe’s speech on Tuesday and the employment report on Thursday.
USD
The AUDUSD seesawed to a high of 0.7409 in late trade on Friday, before coming back to trade at 0.7364 at the time of writing. US Equity markets extended their losses into the weekend with both the S&P 500 and the Dow down -0.8% and the Nasdaq finished the day down 0.9%, the 5th consecutive negative session which brought about the biggest weekly loss in 3 months. US interest rates ticked higher with the 10-year space returning 1.34%, while oil gained 2.1% to $69.60 a barrel. In early data on Friday, US PPI for August rose 0.7% MoM and 8.3% YoY, beating expectations on both fronts by 0.1% with core measures either matching or beating expectations. Little reaction to the data. Markets will be eyeing off the upcoming CPI (Consumer inflation) and US Retail data releases this week.
EUR
The AUDEUR is trading at exactly the same levels seen to Friday, trading at a rate of 0.6234 at the time of writing. European Equities had a quiet session of trade with the CAC down -0.3% while the DAX had minor losses of -0.1%. In the Eurozone, French Manufacturing Production MoM was 0.6% (0.2% expected) and YoY was 4.0% (0.2% expected). French Industrial Production missed expectations with MoM printing 0.3% (0.4% expected) and YoY 4.0% (4.2% expected). In Italy, Industrial Production MoM was 0.8% (-0.1% expected), and YoY was 8.9%. There is little economic data to start the week off from the EU with the main focus being on Inflation news and US Employment data.
GBP
The AUDGBP seesawed in late trade to make 10-day lows of 0.5310 before coming back to trade at 0.5321 this morning. The London Benchmark FTSE 100 had little movement and made a slight gain of 0.1%. In early data, UK economic recovery stalled in July amid worker shortages, with GDP growing by only 0.1% vs 0.5% expected in July, despite the removal of most Covid controls. UK Industrial Production MoM came in at 1.2% beating expectations of 0.4%, while YoY was 3.8% above expectations of 3.0%. In contrast, UK Manufacturing Production was short of expectations with MoM 0.0% (0.1% forecast), and YoY 8.6% (10.9% expected). There’s a flurry of UK data on the docket this week with UK Employment and CPI (Consumer inflation) being the most notable mentions.
NZD
The AUDNZD bucked the trend to make a loss on Friday, trading at 1.0347 this morning, fresh 17-month lows. Given the mostly steady covid numbers, market participants expect an easing in the virus-led local lockdown measures, which in turn has been helping the NZD maintain its strength relative to AUD. Little local data for the Kiwi this week with the focus being on the US CPI and Retail Sales.