Benign Chinese Inflation Data Expected Today
AUD
The AUD starts this week similar to last with mixed results against the majority of its trading peers. Aside from the RBA financial Stability review there was little in the way of local news on Friday. Local equities were up with the ASX closing +0.5%. Asian equities mirrored this with the Shanghai Comp also up 0.5%. Commodities were mixed with Iron Ore down over 2% but Copper closing up 0.6%. Looking ahead and a busy week of Chinese data kicks off this morning with annual CPI & PPI figures. China, unlike the rest of the world is mostly free from inflation concerns however, the flash Covid outbreak in the country may have further impacts on economic recovery. We have to wait until Thursday for the big piece of Aussie economic data - the March Employment Report.
USD
The AUDUSD open slightly lower this morning at 0.7457, having recovered from Saturday morning's two-week lows of 0.7427. Leading into the weekend there was minimal data coming out of the US save the monthly Final Wholesale Inventories figures for February which were revised up to 2.5% from an earlier reading of 2.1%. Wall St had a quiet session with the Dow Jones & S&P 500 closing +0.4% & -0.3% respectively. The ongoing conflict in Ukraine and sanctions had ongoing affect on markets where Oil gained 2.1% to $98.10 a barrel. Both the U.S 2 year and 10 year yields also rose 4-5 bps to 2.51% and 2.71%. There's a massive week of US data ahead starting with CPI data tomorrow night and Fed speak is also littered throughout the week.
EUR
The AUDEUR continues to slide from Tuesday's 5-year highs, opening at 0.6846 this morning. There was no market news of note however the French Presidential Election kicked off on Sunday. French President Macron took ~28% of the vote which was even more than where he sat this time last election - most commentators have Macron retaining his position comfortably which should add some backbone to the EUR. In other news, EU President Von Der Leyen said that the EU would accelerate Ukraine’s membership of the Bloc however there were no reaction to the headlines. The Kremlin has also commented that Russia’s special operation In Ukraine could be completed in the foreseeable future. European equities saw favorable movement off the back of this with the DAX & CAC closing up 1.5% & 1.3% respectively. Looking ahead Thursday night's ECB meeting will be the main event. The ECB is all but certain to leave rates on hold, however it will be interesting to see if an increasingly hawkish tone is delivered as the ECB struggles to reconcile rising inflation with an ongoing war in the east.
GBP
AUDGBP has been flatlining since Thursday, trading within a miserly 25 pip range and opening this morning at a familiar 0.5719. There was no market moving data however the comments of potential cessation of hostility by the Kremlin allowed UK equities to close up 1.5%. There is a slew of data coming out of the UK tonight, kicking off with Monthly GDP, Trade Balance, Industrial & Manufacturing Production figures. Wednesday's CPI data from the UK will be the main event and will certainly be keenly watched by the Bank of England which is set to raise interest rates again at their next meeting early next month.
NZD
AUDNZD has held its Friday gains and found some more opening, trading at 1.0898 this morning. Looking ahead in what is a busy week across the ditch, the NZIER will release its Business Confidence Index which will be followed by the monthly Visitor Arrivals figures. This will outline how the Kiwi is tackling tourism in a post Covid world. However in the main event, the RBNZ is expected to raise interest rates for the fourth consecutive meeting on Wednesday, taking the OCR to 1.25%.