AUD Lifts After Hefty Wage Data

AUD

The Aussie dollar opens up slightly higher across the board, apart from the NZD, while Asian equities saw some positive movement with Shanghai Comp closing at +0.5% and Nikkei at +2.5%. The ASX followed, closing at +1.4%. Commodities closed mostly in the red with Crude Oil -2.3%, Natural Gas -0.8%, Gold -0.1%, Iron Ore -1.5%. Only Silver closed in the green at +1.6%. Yesterday, the Wage Price Index q/q came in at expectations of 1.3%, being the largest increase on record as sharp minimum pay increases and intense competition among employers pushed up many individual pay deals. We also saw positive news from China with their Industrial Production y/y at 4.6% against expectations of 4.5%, and their Retail Sales y/y saw a jump of 7.6% from expectations of 7.1%. For the Aussie dollar today, we have both Employment Change and the Unemployment Rate being released at 11:30am with expectations of both increasing.

USD

The AUDUSD has held recent gains overnight, briefly spiking to 0.6542 before retracing to open at 0.6507. Some more softer US economic data saw Wall St into the green, with the Dow Jones +0.5%, S&P 500 +0.3% and NASDAQ +0.1%. Core PPI m/m came in flat and PPI m/m at -0.5%, both weaker than expected and reflecting easing pipeline inflation pressures. With wage growth looking more subdued amidst rising productivity growth, this reinforces economists' current views of 2% annual inflation by mid 2024. We have various pieces of data out of the US tonight, with the main events being Unemployment Claims, Philly Fed Manufacturing Index, and Industrial Production m/m.

EUR

The AUDEUR opens higher this morning at 0.5998. European equities followed the global trend with the DAX up 0.9% and CAC up 0.3%. A quiet day ahead in the Eurozone with only some minor data pieces being released including the Italian Trade Balance and ECB President Lagarde's speech about short term interest rates.

GBP

The AUDGBP saw a jump overnight, opening at 0.5240 after yesterday’s UK CPI y/y printed slightly lower than expected at 4.6% (largest downward contributors were housing and household services), followed by missed Core CPI y/y and RPI y/y. UK’s PPI Input m/m and HPI y/y came in stronger than expected, but was not able to overturn the GBP’s weakness. UK equities also saw gains with the FTSE up 0.6%. Quiet day ahead for the pound with no data to be released until tomorrow’s Retail Sales m/m.

NZD

The AUDNZD has kept dropping from the strong NZ Visitor Arrivals data, opening at 1.0801 this morning. No news out of New Zealand today, with Friday’s PPI Input q/q, and PPI Output q/q to finish off the week.