AUD Struggling for Support Ahead of Tomorrow’s Inflation Figures
AUD
The Aussie Dollar failed to reclaim any lost territory in the overnight session opening mixed this morning after a relatively quiet night in data. Asian equities were down across the board with ASX -1.1%, Shanghai Comp -0.3% and Nikkei -0.1%. Commodities followed this trend with Crude Oil losing 1%, Natural Gas down a considerable 6.9%, Gold down 0.1% and Silver down 0.4%, with the only exceptions being Iron Ore up 0.7% and Copper gaining 1.6%. A quieter day for local data with only Company Operating Profits q/q coming in well above expectations of 1.8% at 10.6% followed by no market reaction. Looking to the day ahead, there are a few mid-tier data releases in the form of Current Account, Private Sector Credit m/m and Retail Sales m/m with markets expecting mixed results. Of course, markets stay in anticipation of tomorrow’s CPI and GDP data release.
USD
After briefly touching close to 2-month lows of 0.6698 in yesterday’s session, the AUDUSD pair fought back to reclaim an opening level of 0.6731 this morning. US equities all finished yesterday’s session in the green with Dow Jones +0.3%, S&P 500 +0.6% and NASDAQ +0.7%. Last night we saw US Durable Goods Orders for January printing at -4.5% down from +5.1% and lower than expectations of -4.0%. The Core measure which excludes travel spending (including notoriously fickle airfares), went the other way and rose by 0.7% to beat estimates of 0.1%. US Pending Home Sales for January also rose 8.1% m/m to easily beat expectations of a 1.0% gain. Little reaction to the data. Tonight we will see the release of some mid-tier data out of the US in the form of Goods Trade Balance, Prelim Wholesale Inventories m/m, HPI m/m, Chicago PMI and Richmond Manufacturing Index. The stand out data release tonight will come in the form of CB Consumer Confidence which is expected to rise from 107.2 to 108.5.
EUR
Despite a light session in Euro data, the AUDEUR pair continued to fall away overnight, seeing 2-month lows of 0.6341 before opening this morning at 0.6351. European equities were higher on close last night with the DAX up 1.1% and the CAC up 1.5%. Last night we saw M3 Money Supply y/y miss a 3.9% expectation coming in at 3.5% and Private Loans y/y also missing an expectation of 3.9% coming in at 3.6%. Both misses failed to move the AUD higher against the EURO. Tonight we will see some mid-tier data out of France in the form of Consumer Spending m/m, Prelim CPI m/m and Prelim GDP q/q. As well as Spanish Flash CPI y/y and German Import Prices m/m, markets expect mixed results.
GBP
Despite a lack of data, the AUDGBP dropped almost half a cent overnight, opening at one-month lows of 0.5585 this morning. British Equities where higher on close with the FTSE +0.7%. MPC Member Broadbent Spoke overnight, no marker reaction. Interestingly, UK PM Sunak and EU’s von der Leyen held a press conference in which they announced details of what was called the Windsor Framework. It was called a decisive breakthrough with the removal of any type of border on the Irish Sea and the ability of Northern Ireland lawmakers to stop EU rules applying there, however the European Court of Justice would be the “sole, final arbiter of EU law”. To look out for tonight we have MPC Member’s Cunliffe, Pill and Mann speaking.
NZD
The AUDNZD remained relatively flat, with little reaction to the Retail Sales data misses early in the session, opening this morning at 1.0923. A quiet day ahead with only the ANZ Business Confidence coming in previously at -52. Nothing else until Wednesday’s Building Consents release.