Markets Await US Inflation Figures Tonight
AUD
AUD had a mixed performance overnight struggling to gain any new significant ground against most majors. Asian equities were mixed to start the week with the Hang Seng adding 2.1% and Nikkei falling 1.1%. The ASX closed 0.5% lower as an increasing number of listed companies revealed they had exposures to Silicon Valley Bank. Mixed performance for commodities as well with Gold up 0.2%, Silver flat at 0% and Iron Ore up 0.6%. Unlikely to be market moving but interesting all the same. The NAB business survey for February is out today and was nominated by Governor Lowe as an important upcoming data release. Firms' reported business conditions, including forward orders, were above average in January, but had moderated a little. The monthly measure of consumer confidence is also due on Wednesday and is expected to have remained weak. Tomorrow, we have a string of data being released from China. Most notably the Unemployment Rate expected at 5.3%, Retail Sales y/y at 3.5% and Industrial Production y/y at 2.6%.
USD
AUDUSD jumped around last night as the SVB developments and policy reactions were announced reaching highs of 0.6715 before opening off the highs, currently at 0.6666. US equities were mixed overnight despite the ongoing uncertainties surrounding SVB and the resulting investor sentiment. The NASDAQ was trading +0.5%, and the S&P 500 was -0.1%. Core and headline CPI data for February are due and are likely to remain firm, suggesting that the disinflation trend may be stalling. Economists are suggesting they see risks as tilted to the upside relative to the consensus estimate for core CPI (+0.4% m/m). The ~2% m/m increase in gasoline prices should make a positive contribution and impact both core and core services ex-housing through airline fares. Elsewhere, used cars & trucks may contribute positively after providing relief in January. The preliminary estimate of Manheim’s Used Vehicle Index rose +4.3% m/m in Feb-23, the strongest gain since Oct-21. All eyes remain firmly on the fallout of the SVB collapse that continues to unfold ahead of tonight’s key inflation data from the US.
EUR
AUDEUR is flat from yesterday after creating fresh 12-month lows at 0.6157 before opening currently at 0.6205. European equities opened sharply lower with Eurostoxx -1.5% and CAC -2.9%. The SVB fallout continued to impact markets through the European morning as German two year bonds rallied with yields falling 30bp, setting up for the largest drop on record. Meanwhile traders trimmed the ECB peak rate pricing to below 3.5%. Italian Industrial Production m/m is out today forecasted at -0.3% from a previous of 1.6%. European data will remain quiet up until Friday where we have the Main Refinancing Rate data as well Monetary Policy Statement and ECB press conference.
GBP
AUDGBP made a solid effort forward overnight, reclaiming the 0.55 mark before retracing down opening flat at 0.5456. The FTSE took a hit along with the other European Equities losing 1%. Tonight, we have strong data being released for the UK with Claimant Count Change expected at 12.5k. This data is important as it measure the change in the number of people claiming unemployment related benefits during the previous month. Previous monthly data priced in at -12.9k so it is a bullish turnaround. Average Earning are expected at 5.7% and Unemployment Rate is expected at 3.8% higher than previous of 3.7%.
NZD
AUDNZD made its way to claim the 1.08 mark before retracing down to lower 1.07’s opening up currently at 1.0715. On a data front it has been a quiet week for the Kiwi dollar with most notable data mover being tomorrow morning as GDP q/q is expected at -0.2% solid difference from its previous data release of +2%. This is important as it will show the change in the inflation adjusted value of all goods and services produced by the economy.