AUD Consolidates Recent Gains
AUD
The Aussie dollar opens up against most majors while the ASX closed with gains of 0.9%. Asian equities were also higher with the Nikkei adding 1.1% and Hang Seng up 0.5%. Onto the commodities, metals were completely flat, with Gold, Silver and Iron Ore all with 0.00% change, while Natural Gas lifted to +1.8% and Crude Oil +2.5%. Domestically, we had the Goods Trade Balance miss at 6.79B against the expected 9.55B yesterday, with little effect on the market in light of ongoing interest rate announcements for the majors. Today, China has the Caixin Services PMI released at 12:45pm, expected to show a slight expansion at 51.0, against 50.2 last month.
USD
The AUDUSD continued to rally to 3-week highs of 0.6450 in yesterday’s session off the back of the Fed's interest rate pause, opening today at 0.6432. It was another strong night on Wall St. seeing the S&P 500 close +1.8%, the Nasdaq +1.7%, and the Dow Jones +1.7%. Last night the Unemployment Claims released slightly higher than expected, showing 217K people filing for unemployment insurance in the past week, as opposed to 212K in their previous week and 210K in expectations. Tonight, at 11:30pm three important datasets by the US Bureau of Labor Statistics are released. The Non-Farm Employment Change is expected to fall to 178K from last month’s 336K, Unemployment Rate to remain unchanged from last month at 2.8%, and the Average Hourly Earnings m/m to slightly increase to +0.3% from its previous +0.2%. Though long-standing trends such as aggressive job switching and hefty wage gains now show signs of reversing, hiring is still strong, which could lead to upward pressure on the greenback.
EUR
The AUDEUR also continued to rally to 3-week highs of 0.6075 in yesterday’s session before retracing slightly to open at 0.6055 this morning. European also fared well with the DAX adding +1.5% and CAC +1.8%. A flurry of Manufacturing PMI data came out of the Eurozone last night, with the German, French, Italian and Spanish manufacturing sector all showing continued contraction in the mid-to-low 40’s. Tonight, we continue to have lower-tier data come out, most notably the German Trade Balance forecasted to be 16.3B and the Eurostat’s Unemployment Rate to remain unchanged from September at 6.4%.
GBP
The AUDGBP opens up at 0.5269 after the Bank of England held interest rates at 15-year highs of 5.25% overnight. The FTSE 100 rose 1.4% following this, with the central bank’s Monetary Policy Committee voting 6-3 to maintain their rates. BoE Governer Bailey continued to push back against market sentiments of cuts, seeing ‘a long way to go’ to reduce inflation. Tonight, we have the Final Services PMI to be released, forecasted to remain flat from last month at 49.2.
NZD
The AUDNZD opens slightly lower at 1.0904, despite no data coming out of the NZ overnight. The RBNZ still has yet to release their tentative Statement of Intent, while eyes will be on the Inflation Expectations q/q next Wednesday.