Australia Votes Tomorrow
AUD
AUD was mixed if not relatively subdued across most majors, the AUDUSD pair being the exception. Market sentiment fluctuated in the last 24 hours; courtesy of mixed US employment figures coupled with better-than-expected Australian employment data. Asian Equities finished the session at either ends with the Nikkei shedding -1.9% while the Shanghai Comp gained +0.4% and Australian Shares fell sharply on Thursday as commodities slumped, the ASX 200 dipping -1.7% to 7,065 points. On Thursday, the Australian jobless rate fell to a 50-year low, full-time employment in April rose by 92.4K, beating expectations of 20K new jobs, while part-time figures dropped -88.4K, lower than the forecasted 0.4K jobs estimated. However, compounding both statistics, the Australian Unemployment rate fell to 3.9% from 4%. There are no macroeconomic events to cap the week off. Australian political news will likely dominate headlines with the Federal Election this weekend.
USD
AUDUSD rallied sharply on Thursday, despite a risk-off market mood, the pair reached highs of 0.7072 before coming back to trade at 0.7045 this morning. US Equities dipped on Thursday as Treasury yield’s role, Dow Jones slipping -0.8%, the S&P 500 index fell -0.6%, it’s worst level since March 2021, while the Nasdaq fell -0.6%. The yield on 10-year Treasuries declined 6bp to 2.83%. Oil fell with WTI down 1.7% to $107.69 a barrel. Into the NY session, weekly jobless claims data was worse-than-expected with initial claims rising to 218k compared to the forecasted, while continuing claims fell to 1.317Mio, marginally better than expectations of 1.320Mio. In lower tier, Philly Fed Business Survey for May was weak, printing at 2.6, down from 17.6 and well below expectations of 15.0. Little-to-no macroeconomic data headed into the weekend with demand for the safe haven currencies likely to remain stronger.
EUR
AUDEUR struggled to gain momentum in the overnight session with the pair opening a handful of pips higher than Thursday, trading at a rate of 0.6656 at the time of writing. European Equities fell sharply on Thursday with the French CAC -1.3% and the German DAX down -0.9%. In the overnight session, in the Eurozone, the ECB unveiled its Monetary Policy Minutes, in which ECB hawks are calling the shots. Analysts noting that that the minutes confirmed the increasingly hawkish tone of ECB members since the April meeting and no longer questions whether the ECB should hike interest rates in July but by how much. To the data this evening, German PPI (Producer Price Index) being the only key data of note.
GBP
AUDGBP enjoyed another day of sideways action, both pairs have remained relatively rangebound this past week, trading at a rate of 0.5647 this morning. The FTSE 100 crashed 1.8% on Thursday, extending losses from the previous session. GBP$40bn has been wiped off the UKs biggest listed companies this year. Little local data in the last 24 hours in the UK session with traders continuing to mull Wednesdays Consumer Price Inflation, after hitting four-decade highs at 9.0% YoY. This data has likely revived some bets on BoE tightening and could remain the key driver for the sterling as well as the April Retail Sales data scheduled for release this evening.
NZD
AUDNZD pair had some slight turbulence in the session with the pair dropping below the 1.10 handle and trading as low as 1.0991 before coming back to trade at 1.1038 this morning. AUD/NZD bulls have taken a breather this month after a stellar rally this year with the pair remaining relatively rangebound and maintain recent 4-year highs. In lower-tier events and this morning, New Zealand’s headline Trade Balance turned to a surplus of $584M versus the previous deficit of -581M on MoM. There is no key data to close out the week.