AUD Trades Higher as General Sentiment Improves
AUD
The Aussie dollar continues it ascent against most majors retaining its positive bias as general risk appetite improves. Locally, yesterday we saw the Westpac Consumer Sentiment come in lower at -1.3% against previous -2.0%. In Equities the ASX was up 1.1% with the NIKKEI performing similarly at 1.1% also, and the SHANGHAI COMP following just behind at 0.8% in a good day for equities and reflecting of the improving risk sentiment. In Commodities, Iron Ore climbed by 1.6%, with Gold also up by 0.4% Overall another quiet one again today in terms of local data in the Aus market. At 11:00am we’ll see the release of the MI Inflation Expectations, with very little much else until the RBA’s Governor Philip Lowe is set to speak tomorrow morning. Markets will be focussed on tonight's US CPI data (see below).
USD
The Aussie continues trading higher against the Greenback today at 0.7180 at time of writing, having risen over the last 5 days to touch 3 week highs. The risk-on impulse benefitted the perceived riskier Aussie amid modest USD weakness, with UE equities capitalising on the improved conditions; the Dow Jones up 1.0%, S&P 500 climbing 1.4%, and the NASDAQ fairing the best up 1.9%. The upbeat mood will be tested as the market awaits the key USD CPI report due just after Midnight tonight, inflation numbers projected at 0.4% opposed to last releases 0.5%, while Core CPI m/m is forecasted at 0.5% against last reports 0.6% In response The Fed’s Bostic suggested there would be at least three 25bp hikes this year and was leaning towards 4 with the possibility of a 50bp move. Following the Inflation data we are set to see a slew of US data throughout Friday Morning with the releases of US Unemployment Claims, Mortgage Delinquencies, Natural Gas Storage data, the 30-y Bond Auction and finally the Federal Budget Balance. If the US inflation numbers miss tonight, AUD could potentially start with a 0.72 tomorrow.
EUR
Following suit with most majors the AUDEUR pair continues its steady climb trading at 0.6281 at time of writing. Relatively quiet in terms of market news out of the Eurozone today with the EU Economic Forecasts at 9:00pm tonight being the only big-ticket item of the day. In Equities the DAX fared well climbing 1.6% in a generally positive day for equities globally. Looking ahead, on Friday we are set to see the German Final CPI m/m projected at 0.4% at par with previous report, followed by the German WPI m/m forecasted at 0.5% above previous 0.2%.
GBP
AUD faring well here also, climbing to 0.5301 against the Pound at time of writing which represents 2 week highs. In equities the FTSE fared well up 1.0%. Out of the UK last night the BOE’s Member Pill expressed some concern that there may be a need for larger than usual policy moves, yet little reaction to these comments in the market. It's the Bank of England’s Governor Baily's turn at the lectern at 8:05pm tonight which will being the main focal point for investors. The week will finish with a bang tomorrow with a raft of data due for release from the UK.
NZD
AUD continuing to trade a sideways channel against NZD, refusing to progress past 1.0765 and opening at a familiar 1.0741 this morning. With no Aussie data to break the deadlock, tomorrow's Inflation Expectations from across the ditch is the next chance of volatility on this cross.