US Jobs Numbers Starting to Show Crack
AUD
A generally quieter weekend paired with softer risk sentiment saw the Aussie dollar preform quite poorly, opening down against the majors this morning with the exception of the USD. Asian equities were lower on close with ASX -2.3%, Shanghai Comp -1.4% and Nikkei -1.7%. Commodities on the other hand closed higher with Crude Oil +1.3%, Gold & Silver both +2.1%, Iron Ore +0.6% and Natural Gas up a notable +21.9%. Nothing out locally on Friday, however we did see New Loans and M2 Money Supply y/y out of China, both beating market forecasts comfortably. Today in China, the National People’s Congress will conclude today whereby the new Premier Li Qiang will make his debut at a media conference. His priorities, style and power dynamics with President Xi will be the focus and will go a long way to shaping China’s economy and market over the next five years. Another quiet day ahead for Aussie data, with nothing noteworthy until Thursday’s unemployment figures.
USD
Despite seeing lows of 0.6564 over the weekend, the AUDUSD pair creeped up slightly this morning to open in the green at 0.6609. Risk sentiment remained soft on Friday following the collapse of SVB Financial Group, the NASDAQ closed -1.8%, the S&P 500 -1.4% and the Dow Jones -1.1% despite the solid US jobs data. US 2 year yields fell 28bps to 4.58%. US Non-Farm Payrolls printed at 311k, down from a negatively revised 504k though above expectations of 225k. The Unemployment Rate in the US unexpectedly rose 0.2%, up to 3.6% though this was partially the result of an unexpected 0.1% increase in the participation rate to 62.5%. Over 300k new jobs were created which was significantly more than expected, however Average Hourly Earnings rose 0.2% m/m and 4.6% y/y, both lower than expectations by 0.1%. A busier week is ahead regardless which includes US CPI (Tuesday) and Retail Sales (Wednesday).
EUR
The AUDEUR pair once again hit new one-year lows this morning of 0.6169, before slightly rallying to open at 0.6193. European equities were also lower on close with both DAC & CAC loosing 1.3%. On Friday we saw German Final CPI m/m remain flat at 0.8%, and French Trade Balance came in above expectations of -14.0B at -12.9B . A quiet day ahead with only the Eurogroup Meetings to look forward for. Nothing really of note until Thursday night's ECB interest rate decision which markets are expecting to result in a 0.5% hike in current interest rates which would take the European rates to 3.5%.
GBP
The AUDGBP saw a steep and steady decline since Friday's open, seeing one-year lows of 0.5479 before slightly retracing to open this morning at 0.5477. British equities were lower on close with the FTSE down 1.7%. The UK economy grew 0.3% in January, beating estimates of +0.1% with the uptick driven by services. To the data, and the January Index of Services remained flat at 0.0%, coming in above estimates of -0.1%, there was also a slew of other mid/low-tier data that missed expectations. A quieter day ahead, with no notable data out until tomorrow’s Claimant Count Change and Average Earnings Index 3m/y.
NZD
The AUDNZD saw two month lows of 1.0724 before rallying this morning but still opening lower at 1.0764. On Friday we saw the BusinessNZ Manufacturing Index beating the previous readings of 54 coming in at 55.8. We also saw Manufacturing Sales q/q miss the previous +5% reading to come in at -0.4%. This morning we saw BusinessNZ Services Index also beat the previous reading of 54.7, coming in at 55.8, we also saw the FPI m/m miss previous readings of 1.7% coming in at 1.5%. Nothing else noteworthy until Thursday's GDP q/q release which is tipped to show a significant contraction of -0.2% for.