AUD Eyes Off Chinese Activity Data

AUD

The Aussie dollar trades mostly higher across the board this morning apart from our Kiwi neighbors, even after some lackluster NAB business confidence results yesterday. Commodities have also seen a boost with Copper up 0.5%, Gold and Silver both flat, while Iron Ore was the best performer up 1.7%. Asian Equities also followed suit all performing well with the NIKKEI up 0.3%, SHANGHAI COMP up 0.3% and the ASX up 0.8%. Looking to today we are all set for the Wage Price Index q/q to be released at 11:30am for the Q3 period with expectations showing a pickup in growth to 1.2%, driven partly by large increases in minimum and award wages. While a stronger wages growth figure has the potential to influence market views on future RBA decisions, the impact is likely to be limited as the stronger-than-expected underlying inflation (particularly in services) that we have already observed for Q3 partly reflects the increase in wage growth that is expected. We also have some important data out of China with their Industrial Production y/y, and Retail Sales y/y set to be released at 1pm with both expected to increase.

USD

The AUDUSD ripped higher overnight, opening at 0.6507, after the USD fell more than 1% against major currencies when their consumer price data showed the pace of inflation moderating further in October, increasing the odds that the Federal Reserve is done hiking interest rates. US CPI for October was flat MoM and 3.2% YoY with both results 0.1% weaker than expected. Core measures also missed by 0.1% at 0.2% MoM and 45.0% YoY. Wall St remained buoyant on the close with the NASDAQ up 2.4%, S&P 500 up 2.0%, and the Dow Jones up 1.6%. All eyes will now be tracking the release of US Core PPI m/m, Core Retail Sales m/m, Empire State Manufacturing Index, PPI m/m and Retail Sales m/m set for release overnight at 12:30am.

EUR

The AUDEUR opens up slightly higher this morning at 0.5978, even after the German ZEW Survey for November rose to 9.8, up from -1.1 and better than expectations of 5.0 yesterday. European equities followed suit with the DAX up 1.8%, and CAC up 1.4%. We have a few bits of minor Eurozone data today with German WPI m/m, French Final CPI m/m, Industrial Production m/m and Trade Balance set for release.

GBP

The AUDGBP opens higher this morning at 0.5197 after yesterday’s UK employment data for October came through largely as expected with the Claimant Count steady at 4.0%, while Jobless Claims Change rose to 17.8k, down from 20.4k. UK equities also came through in the green with the FTSE up 0.2%. Looking ahead this evening we have the key release of the CPI y/y which is expected to fall significantly, due to energy prices. The Bank of England expects the inflation rate to have dropped in October to 4.8%, while economists predict a slightly larger fall to 4.7%. The BOE said it sees inflation slowing further to 4.5% this year.

NZD

The AUDNZD trades slightly lower this morning at 1.0823, after the release of the Visitor Arrivals m/m showed an 2.4% increase with yearly arrivals at 2.77 million in the September 2023 year, up 2.08 million from the September 2022 year. No further news out of New Zealand until Friday with the release of their PPI Input q/q, and PPI Output q/q.