AUD Steadies Ahead of Today's Jobs Figures
AUD
After what was a very tough Tuesday night for the AUD, yesterday the AUD stemmed the bleeding and manage to claw back some losses. As one would expect following the bloodshed in global stocks, the ASX closed down -2.6% yesterday. Commodities were mixed with Gold down 0.3%, Silver flat, SGX Iron Ore up 1.8%, and CMX Copper down -1.2%. Important data out this morning for the Aussie will be the Unemployment Rate and Employment Change at 11:30. Markets are currently predicting a flat rate of 3.4% for Unemployment and 35.5k more employed people versus the 40.9k jobs lost last month. Fairly quiet after this for the rest of the week apart from some Chinese data out on Friday (Retail Sales, Industrial Production, and Unemployment Rate).
USD
The downside momentum for AUDUSD bottomed at 0.6705 late yesterday and has since recovered slightly to 0.67655 at time of writing. Apart from this time last week, this is the lowest level this pair has seen since June 2020. Overnight US PPI m/m data came in exactly on expectation last night at -0.1%, and core PPI came in slightly stronger at 0.4% against the 0.3%. In contrast to the previous night's surprisingly high CPI data, the more benign PPI data last night perhaps opened the door to the AUD consolidation we seen. The US’ Crude Oil Inventories came in much higher than expectation at 2.4 mio rather than the forecasted 1.9 mio. US equities no longer in the red this morning, seeing a slight rebound, with S&P 500 up 0.2%, NASDAQ up 0.7%, & Dow Jones up 0.1%. Some more big data out from the US tonight, Retail Sales m/m, Core Retail Sales, Unemployment Claims, the Empire State and Philly Fed Manufacturing indices. Plenty of room for even more volatility off the back of these.
EUR
Trading slightly higher this morning at 0.6768, after a rally around 10pm last night. This was off the back of the Eurozone’s July Industrial Production which fell 2.3%, coming in worse than expectations of -1.1%. European equities also saw a drop yesterday with the DAX falling 1.2% and the CAC falling 0.4%. Tensions with Russia are still rising as Putin warned the EU that if price caps were imposed then the Kremlin would view that as a breach of contract and end flows completely. EU leaders have reportedly began looking to end delays on the trans-Saharan pipeline, which would flow from Nigeria into Spain and Italy. This project was first proposed in 2002, but the idea has now been revived as a solution to Europe’s dependence on Russian gas and oil. It is unclear how quickly this project will be able to get off the ground.
GBP
AUDGBP opens only slightly down this morning at 0.5847 after what was a volatile night of trade, touching a 3 week low of 0.5807 at the trough. The volatility was a result of a slew of UK data, including August CPI which came in at a mammoth 9.9% for the year, which was just below expectations of 10.0% and only marginally lower than the previous result of 10.1%. Obviously there is still plenty of work for the BoE to do to bring inflation back to the target range, with this number almost certainly locking in a 75bps rate hike at next week's meeting. Only light data due tonight.
NZD
The NZD opens down this morning at 1.1156 after seeing strong Q2 GDP figures out of NZ. Markets had Kiwi GDP growth pegged at 1%, this morning a 1.7% growth figure was announced. This is a strong figure considering the Q1 figure saw a 0.2% drop. Quiet in terms of data for the rest of the week apart from the Business NZ manufacturing index set to be announced tomorrow morning.