Risk On as AUD Gains Across the Board
AUD
The Aussie dollar has rallied against most majors regaining the lost ground of the last few days and then some, in what could be described as a risk-on market sentiment. Asian equities were mixed on the close with the Hang Seng down 0.8%, while the Nikkei and ASX saw tepid gains up 0.3% and 0.1% respectively, with Aussie equities boosted by copper-linked stocks, which powered the materials sector +1.8%. In Commodities Gold gained 0.1% with Iron Ore performing a little stronger up 0.3%. Generally quiet on the Australian macroeconomic calendar today with only the Westpac Consumer Sentiment due out at 10:30 this morning, followed by the NAB Business Confidence at 11:30 indicators of economic health confidence which aren’t expected to move markets, but may give us better insight into the perspective of both consumers and businesses in relation to Aussie economic health.
USD
Over the last 24 hours the Aussie has seen the biggest daily gain against the Greenback in three weeks, momentarily pushing above the 0.7 handle for a peak of 0.7009, to then retrace to the current trading value of 0.6983 at time of writing. The Big Dollar remaining on the back foot with US 10-year yields falling and the inversions between the 2 year and 10 year yield moved to around 45bp. In US Equities Wall St was firming in early trade with gains approaching 1% but closed short with the S&P 500 and NASDAQ both losing -0.1%, with only the Dow Jones retaining minor gains up 0.1%. Looking ahead for the day, nothing monumental on the cards for the region but what we will see is the release of the NFIB Small Business Index followed by the Prelim Nonfarm Productivity q/q and Prelim Unit Labor Costs q/q prints. Looking further ahead the larger interest items will be the CPI m/m release due tomorrow night expected at 0.2% with PPI figures due the following day.
EUR
The Aussie reclaims the lost ground of the last 5 days against the Euro, once more trading above 0.68, currently 0.6851 at time of writing. European Equities saw a positive 24 hours closing the session with both the DAX and CAC gaining 0.8%. Out of the Eurozone last night we witnessed the release of the Sentix Investor Confidence printing at -25.2, above expectation of -29.1 and an improvement on previous of -26.4. Relatively light-on in terms of news, as seems to be the standard globally for the day, with nothing to be seen out of The Zone until Wednesday’s German Final CPI m/m predicted at 0.9%. Of course the fears of recession and Russian action regarding the nordstream pipeline still looms heavily over the heads of European policy makers, yet not much more of note to report for the time being.
GBP
The AUDGBP has seen a stellar last 24 hours gaining over half a cent to currently be trading at two week highs of 0.5780 at time of writing. UK Equities were in the green with the FTSE gaining 0.6%. This morning at 9am we saw the release of the BRC Retail Sales Monitor y/y printing a positive 1.6% well above expectation of -1.5% and a previous of -1.3% which gives a solid indicator for sales at the retail level. Generally quiet for the day looking ahead with only the 30-y Bond Auction set for release tentatively throughout today. Looking ahead it shall remain quiet until Friday afternoon where we are set to witness a slew of UK data in the form of GDP prints and production releases.
NZD
The Aussie has moved higher against the NZD currently trading at 1.1107 at time of writing. From across the ditch over the last 24 hours we saw the release of the Inflation Expectations q/q print at a stubbornly high 3.07% against a previous of 3.29%, which will be the only piece of data we see from NZ until Thursday’s Visitor Arrivals figures.