AUD Leaps on Resilient Jobs Market
AUD
The Aussie dollar opens mixed across the board this morning, after an exciting day yesterday starting early with the US Fed’s bearish comments aiming for a 75-basis point cut by the end of 2024, followed mid-morning by Aussie labour force data coming in substantially above expectations, causing the AUD to shoot up to near-6-month highs against most majors. Asian equities were mixed on Thursday with the Hang Seng up 1% and Nikkei down 0.7%. The ASX rallied to an 18-week high, up 1.65% off the back of the strong overnight lead from Wall St. Despite high job gains (61.5k people employed in the previous month), the Unemployment Rate printed at 1.5y highs of 3.9%. Resilience in our job market gave the AUD a further lift into the early afternoon. This morning, Aussie Flash Manufacturing & Services PMIs printed at 47.8 and 47.6 respectively, being slightly higher than the previous figures, although indicating Australia's private sector continues to contract given softened demand. Markets will be eyeing off Chinese Industrial Production & Retail Sales in today's early afternoon.
USD
AUDUSD opens up at 0.6697, experiencing a massive rally the day prior caused by the dovish FOMC commentary of a 75-basis point cut by end of 2024, causing the AUDUSD to reach highs of 0.6728 by 2PM and moving sideways to where we open today. US markets closed with the Nasdaq -.3%, the S&P 500 flat, and the Dow Jones +.2%. US Retail Sales for November printed at +0.3% MoM, up from -0.2% and better than expectations of -0.1% with all core measures also comfortably beating expectations. Weekly jobless claims also released and also beating expectations with initial claims at 202k against forecasts of 220k. Tonight, we'll see Flash PMIs, Industrial Production & the Empire State Manufacturing Index.
EUR
AUDEUR reached highs of 0.6170 yesterday before retracing to open down today 0.6093 off the back of hawkish ECB commentary. The DAX finished the day -0.1% and CAC closing 0.6% positive. The European Central Bank left rates on hold as widely expected, with commentary indicating that interest rates will need to stay at restrictive levels to bring inflation back, aiming for a gradual decline over 2024 with a 2% inflation target in 2025. Tonight, we'll see Eurozone PMIs, all of which expected in contractionary territory.
GBP
AUDGBP opens down today at 0.5244, off the back of a massive rally reaching 6-month highs of 0.5320 after hours and retracing aggressively off the back of the Bank of England interest rate announcement and Monetary Policy Statement. The FTSE ended the day with a 1.3% improvement. The Bank of England left monetary rates on hold at 5.25% as widely expected in a 6-3 vote among Members. They did express some concern about upside risks to the outlook on wages and noted that inflation would remain around current levels into 2024 before drifting lower as some base effects are negated. Data set to release today is the Flash Manufacturing PMI and Flash Services PMI, with a quiet week awaiting next week with only the CPI y/y and Retail Sales m/m.
NZD
AUDNZD opens higher today at 1.0991 with majority sideways movement throughout yesterday's session. This morning's BusinessNZ Manufacturing Index printed at 46.7, being contractionary territory. Markets look to Westpac Consumer Confidence data and the BusinessNZ Services Index on Monday.