Markets Expecting Cup Day Rate Hike
AUD
The Aussie dollar opens down across all majors this morning while the ASX finished yesterday's session up 0.3% driven by healthcare stocks. Asian equities had a strong start to the week with the Nikkei up 2.4%, and Shanghai Comp up 0.9%. Yesterday signs of cooling in the Aussie labor market were evident with the ANZ Job Advertisement data showing the second consecutive month of lower job ads. Today at 2.30pm we have the RBA Cash Rate announcement for November. Following the unexpectedly strong inflation data from two weeks ago, and amongst recent calls from the IMF for the RBA to increase rates to battle persistently high inflation, futures markets are all but certain we'll see the cash rate increased from 4.10% to 4.35% today. Markets will be keenly eyeing the accompanying statement for indications of the RBA's willingness to potentially raise rates beyond today's decision.
USD
AUDUSD opens slightly lower at 0.6486 pulling away from the 0.65 handle we saw after the weekend rally following the weak employment data from the US. Wall Street saw a calmer session yesterday closing mostly down with the Nasdaq finishing flat and the S&P 500 and Dow Jones down -0.2% and -0.1% respectively. A quiet week ahead for the US following a data-heavy weekend. Tonight there is a swathe of 5 separate Fed Members speaking at independent events, but no economic data releases of note.
EUR
AUDEUR opens in the red at 0.6053 with equities also down. The DAX saw yesterday's sessions finish down -0.4% and CAC down -0.5%. Last night we had a handful of Services PMIs out of the Eurozone printing mixed; Spain saw an increase from 49.4 to 51.1, Italy saw a drop from 48.7 to 47.7, France also saw a drop from 46.1 to 45.2, and the Eurozone overall held at 47.8. Worth noting that all of these services PMIs are all less than 50 which indicates industry contraction. Tonight's data includes European Producer Price Index (PPI) as well as German Industrial Production, neither of which usually create massive excitement in currency markets.
GBP
AUDGBP opens flat this morning at 0.5256 with the FTSE also finishing yesterday's session flat. Last night, we had Construction PMI which printed worse than expectations from 46.1 to 45.6 showing construction output continuing to decline. Only low-tier data due from the UK tonight in the form of the Halifax House Price Index (HPI), but things might ramp up tomorrow night when we have Bank of England Governor Bailey speaking.
NZD
AUDNZD opens slightly up at 1.0879. Yesterday morning we saw ANZ Commodity Prices printing at 2.9% up from the previous 1.4%. With this pair having topped out on Thursday at 1.0942 and seemingly looking for its next trend, perhaps today's RBA's interest rate decision will provide the substance.