RBA's Bullock Affirms Inflation Past Its Peak

AUD

The Aussie dollar opens mixed against the majors following an abundance of overnight news out of the US and the Eurozone. The ASX slid 0.1% with real estate the biggest mover giving up 1.5%. RBA Governor Michelle Bullock spoke last night at the Australian Business Economists Annual Dinner where she discussed the recent monetary policy decision to raise interest rates. She stated that “Inflation is past its peak and heading in the right direction, but it is likely to return to target a bit more slowly than we previously thought” and that the “remaining inflation challenge we are dealing with is increasingly homegrown and demand driven”. This morning's domestic PMI data showed our private sector activity continued to decline midway through the final quarter of the year, with lower new business (including export business) negatively impacting output. That said, employment continued to rise, supporting the clearance of backlogged work.

USD

AUDUSD opens slightly down today at 0.6542 following this morning’s US Unemployment Claims which printed better-than-expected at 209K, down from the expected 226K and previous 233K. Wall St entered its final hours of trade with the Nasdaq trading +.5%, the Dow Jones +.4%, and the S&P 500 +.3%. The University of Michigan Sentiment Survey for November was revised up to 61.3 from an initial reading of 61.0. Of note, the inflation expectations for both 1 year and 5-10 years were 0.1% higher than expected at 4.5% and 3.2% respectively. No further news for the US until their Flash Manufacturing and Services PMI released early Saturday morning, both forecasted for a slight decrease to 49.9 and 50.4 respectively.

EUR

AUDEUR opens relatively flat at 0.6009 following a brief spike last night to 0.6022. European equities closed green across the board with the DAX and CAC closing up 0.4%. Early this morning they had their Consumer Confidence for November which rose to -16.9, up from the expectations of no change at -17.8. Tonight, they will have the Eurozone, French and German Flash Manufacturing and Services PMI’s with all expected to come in below a level of 50, indicating an industry contraction in the Eurozone.

GBP

AUDGBP opens up higher this morning at 0.5235 off the back of the UK government’s Autumn Forecast Statement where a bigger-than-expected cut in social security contributions and made incentives for business investment permanent in a bid to speed up the country's sluggish economy. The FTSE closed down 0.2% yesterday. Tonight, they have their Flash Manufacturing PMI expected to come in at 45, an increase from previous 44.8, and Flash Services PMI expected to come in unchanged at 49.5.

NZD

AUDNZD opens higher today at 1.0865 following a 0.33% spike last night to a high of 1.08876. No news today for the Kiwis until tomorrow morning where they have their Retail Sales q/q expected to increase to -0.8% from its previous level of 1%.