Weaker China Inflation Numbers Undermine AU
AUD
After a softer session in terms of data, markets still experienced a choppy weekend with the Aussie dollar opening mixed against the majors. Asian equities were also mixed with ASX -0.8%, Shanghai Comp -0.3% and Nikkei +0.3%. Similarly commodities where also mixed on close with Crude Oil & Natural Gas both +2.3%, Gold -0.2%, Silver -0.6%, Iron ORE -0.1%. A quiet Friday for local data with only RBA Monetary Policy Statement where the RBA revised its forecasts for core inflation and wage growth and warned further increases in interest rates would be needed to head off a damaging wage-price spiral. On the Chinese front we saw CPI y/y and PPI y/y both miss expectations ay 2.1% and -0.8% respectively, undermining any hopes for an AUD revival. However, we also saw Chinese M2 Money Supply y/y and New Loans both beat expectations convincingly. Another quiet day ahead with no local data to be released.
USD
The AUDUSD pair saw a further slip despite seeing highs of 0.6960 during Friday's session, the AUD opens around 20 basis points lower than Friday's open at 0.6915. US equities were mixed on the close with Dow Jones +0.5%, NASDAQ -0.6%a and S&P 500 +0.2%. University of Michigan Sentiment Survey for February printed at 66.4, up from 64.9 and better than forecasts of 65.0. Prelim UoM Inflation Expectations was 4.2% against a previous reading of 3.9% while 5-10 year inflation was 2.9% as expected. We also had some mid-tier data in the form of the Federal Budget Balance came in at -38.8B compared to the previous reading of -85.0B. No data out today, all eyes on Wednesday’s core and headline CPI numbers from the US for January.
EUR
The AUDEUR pair has seen a decent upswing hitting highs just shy of 0.6500 in the early hours of Saturday morning before dropping off slightly to open today at 0.6480. European equities were down on Friday's close with the DAX & CAC loosing 1.4% and 0.8% respectively. A subdued Friday with only one data release as Italian Industrial Production m/m persuasively beat expectations of 0.2% reading at 1.6%. Another quieter day on the euro front with only the commencement of the Eurogroup Meetings. Nothing really of note until Wednesdays EU Economic Forecasts accompanied by ECB President Lagarde Speaking.
GBP
The AUDGBP ticked slightly higher over the weekend off the back of some poor GDP data, opening this morning slightly up at 0.5740. British equities saw a slight decline as the FTSE lost 0.4% on Fridays close. The UK’s GDP m/m dropped to -0.5% under expectations of 0.3% and a previous reading of +0.1%.UK GDP q/q was unchanged in Q4 compared with the previous quarter, however, it remained 0.8% below the pre-pandemic level, leaving the UK as the only major economy in this predicament. We also saw mixed results in a number of mid/low-tier data, having almost np effect on the currency pair. Nothing on the cards today for British data in anticipation of tomorrow’s Claimant Count Change.
NZD
The AUDNZD pair remains fairly flat opening this morning at 1.0960 as the lack of any major data hasn’t encouraged any notable movements. On Friday we had BusinessNZ Manufacturing Index come in at 54.5, higher than the previous 47.8. This morning we also saw the release of BusinessNZ Services Index coming in 54.5, also higher than the previous reading of 52.