China Trade Bans Up For Negotiation

AUD

The AUD is up against the majors this morning with the exception of the Kiwi dollar, improved risk sentiment off the back of China announcing the rolling back of some their Zero-COVID restrictions for travelers helped this slight strengthening of the AUD and NZD along. Commodities are mixed overnight with Gold -0.5%, Silver -2%, Iron +0.3%, and Copper -0.4%. Looking to equities, the ASX was -0.3%, The Shanghai Comp was -0.3%, Nikkei -0.4%, and the Hang Seng +1.6%. Minimal data out of Australia this week. Some minor pieces of data out of China on Saturday – the Manufacturing PMI, currently predicting 48.0, and their Non-Manufacturing PMI, currently priced in at 45.8. Also to watch as a developing theme is the negotiation of the dropping of Chinese trade bans (wine, barley, seafood, meat etc) which if successful should prove AUD positive.

Fun fact: Australia has a larger population of camels than Egypt, and Australia exports camels to middle eastern countries.

USD

The AUDUSD pair is up about 20 pips from yesterday, after reaching an overnight high of 0.6801, it settled at 0.6739 this morning. US equities saw red in the overnight session, S&P 500 -0.8%, Dow Jones -0.6%, NASDAQ -1%. A few small pieces of data out in the early hours of this morning – the Richmond Manufacturing Index came in above expectation of an index value of 1, vs the -10 expectation. Pending Home Sales m/m came in at -4%, vs the -0.9% expectations. This did little to move markets however. Tomorrow, we have Unemployment Claims, Natural Gas Storage, and Crude Oil Inventories.

Fun fact: If you have a $10 USD note and no debt, you are wealthier than 15% of all American citizens

EUR

The AUD is up slightly against the Euro since yesterday’s opening, sitting at 0.6347 this morning. Typical holiday trading conditions continue as lack of economic data and thinner trading volumes lead to small movements in the market. The DAX and CAC both saw losses overnight, being down -0.5% and -0.6% respectively. Tonight, the Eurozone M3 Money Supply is being released, expecting 5%. We also have Private Loans y/y for the Eurozone expecting a slight increase to 4.3%.

Fun fact: More Chocolate is bought at Brussels Airport than anywhere else in the world.

GBP

The Aussie is up slightly against the Pound Sterling, after seeing about a 50bp gain overnight, we open this morning at 0.5595. Again, minimal data from Great Britain. The Bank of England is due to release its Quarterly Bulletin by the end of this week, which includes commentary on market developments and monetary policy operations, detailing both domestic and international economic issues. On Friday night Nationwide HPI m/m is printing, with markets currently expecting a -0.7%, after last month’s -1.4%.

NZD

After a rally up from 1-year lows this week, the AUD losses momentum against the NZD, opening at 1.0678 this morning. This pair has been unusually volatile over the past week, gaining almost 2c since the beginning of the week. The same lower global risk sentiment that has been improving the AUD’s standing against the majors has also been pushing the Kiwi dollar up against other trading pairs. A very quiet week for economic data out New Zealand, with nothing of note being release until Jan 11th.

Fun fact: The kiwifruit is not native to New Zealand, it actually comes from China, but was renamed after the kiwi bird.