Aussie struggles to conquer key mark amidst strong GDP data

AUD

The Aussie Dollar had a largely positive session against most currency crosses, though a strong local GDP print wasn’t enough to boost the Aussie against the USD, the only outlying pair which continues to stutter around key resistance levels. A combination of factors including the easing of lockdowns in Shanghai, general risk-on market sentiment, a rise in Aussie Commodities and equities and the aforementioned positive Aussie GDP data yesterday has spurred on a gradual positive momentum that has pushed the Aussie back into the green against its contemporaries. As mentioned above the Aussie GDP print was better than the expected 0.6%, printing positive growth of 0.8% at 11:30 yesterday morning. In local Equities we saw a mixed result on the close with the Nikkei up +0.65%, the Hang Seng down -0.6%, while the ASX closed Wednesdays session up +0.3%. Meanwhile in Aussie Commodities Iron Ore was up +2.1% while Gold remained unchanged. The news of easing of Covid lockdowns in the city of Shanghai, the country's economic center and a global trade hub has offered a modicum of hope for its trading partners. Looking ahead at 11:30 this morning we will see the Retail Sales m/m expected to come in at par of previous at 0.9%, followed by the Trade Balance for April which should remain deep in surplus territory. The most significant event in the next few days will be Next Tuesdays RBA decision on the Cash Rate, with the market already pricing in a hike of 35 basis points.
 

USD

The Aussie trades in quite choppy conditions against the Greenback struggling to conquer 0.7200 mark amid sustained USD buying interest, having peaked at 0.7230 before coming back down to 0.7155, currently trading at 0.7173 at time of writing. In US Equities Wall Street was weaker, with the Dow Jones in the red, down -0.5% while the S&P 500 and NASDAQ fared the worst falling -0.7%. In data last night, Final Manufacturing PMI came in 0.5 short of expectation and previous at 57.0, later followed by the US ISM Manufacturing for May printing at 56.1, up from 55.4 and above expectations of a decline to 54.5 with rises in Prices Paid and New Orders, though Employment slipped. JOLTS Job Openings report printed at 11.40M, a positive improvement against forecasted 11.29M. Late into the night FOMC Member Bullard hit the wires claiming that it was too early to say if they had seen a peak in inflation. The Fed released their latest Beige Book which indicated that growth in the US economy was “slight or modest” with employment growth “modest or moderate”, these being a slight downgrade from “moderate” in both instances in the prior release. Members also noted that inflation, rising interest rates, the Russian invasion of Ukraine and COVID remained key concerns with some districts reporting greater concerns about future growth prospects. Little reaction to the release. Looking ahead the big-ticket item left for today is the ADP Non-Farm Employment Change, this will be followed by a slew of data releases, most prominent of the rest install being the unemployment claims. Tomorrow more employment data and average hourly earnings prints await.
 

EUR

The AUDEUR par has seen a steady rise for the Aussie currently trading at 0.6734 at this morning, riding the momentum we have seen overall for the Aussie dollar against most majors. Equities European equities opened higher with Eurostoxx up +0.6%, and the DAX down -0.3%. Germany reported weak retail sales in April of -5.4%, missing expectations of -0.5%. In France, May final Manufacturing PMI was revised higher from 54.5 to 54.6. Eurozone final May Manufacturing PMI fell to an 18-month low of 54.6 (April 55.5). Unemployment in the Eurozone was unchanged printing at 6.8% in April, in-line with expectations. From the ECB we heard member Holzmann hit the wires and joined the ECB hawkish rhetoric party, a vast shift in tone from the central bank speakers calling for a 50bp hike after new inflation record prints. Looking ahead the Eurozone has a number of items on their macroeconomic calendar for Friday, yet none of which seems prominent enough to move markets as the focus still remains on the ECB and the ever-looming threat of Russia hold over the gas pipelines to Germany.

GBP

The Aussie Dollar has been quite strong against the Pound Sterling in the last 24 hours gaining a full 1 per cent amid a relatively quiet UK session, currently trading at 0.5746 at time of writing. In UK Equities the FTSE was prominently in the red, down -1.0%. Final Manufacturing PMI for the UK came in as expected, but little interest developed. No data to be seen out of the UK today or for the rest of the week amid the Royal Jubilee Bank holidays.
 

NZD

Aussie momentum propels the AUDNZD pair higher against our cousin across the ditch now having fully regained the lost ground we suffered in the wake of the RBNZ Interest rake hike, currently be trading at 1.1068. In early data from the Kiwis, Terms of Trade Index for the first quarter (Q1) of 2022 rose +0.5%, matching forecasts, while reversing the previous -1.0% figures. Little to be seen in terms of market data out of NZ, with majority of direction to be drawn from elsewhere.