European Interest Rates Go 0.5% Higher
AUD
The Aussie Dollar tracked higher in the last 24hrs, benefitting from decent labor market data yesterday and a general improvement in risk sentiment as market jitters around the feasibility of some US banks begin to settle. Asian equities were lower on close with the ASX -1.5%, Shanghai Comp -1.1% and Nikkei -0.8%. Commodities saw a mixed session with Crude Oil +0.7%, Natural Gas +2.7%, Gold +0.2%, Silver +0.5% and Iron Ore -0.2%. Yesterday we saw Australia’s Employment data beat market expectations with Employment Change coming in at 64.6K beating expectations of 49.7K and the Unemployment Rate coming in at 3.5% verses and expected 3.6% which lead to a slight AUD rally in the aftermath. Yesterday also saw the MI Inflation Expectations come in at 5.0% verses a previous 5.1% with little reactions from markets. Nothing of note to be released until Monday with China’s Foreign Direct Investment ytd/y and RBA Assistant Governor Kent Speaking.
USD
The AUDUSD pair saw a slow and steady rally gaining over 40 basis points to reach highs of 0.6668 before slightly dipping to open this morning at 0.6654. US equities were in the closed in the green following some positive developments regarding Credit Suisse, Dow Jones +1.2%, S&P 500 +1.8% and NASDAQ +2.5%. Yesterday saw a slew of mixed results from mid/low-tier data including Crude Oil Inventories, Building Permits and Import Prices m/m. The stand out data release from the US being Unemployment Claims which comfortably beat expectations of 205K, coming in at 192K. Also of note we saw the Philly Fed Manufacturing Index for March printed at -23.2, up from -24.3 though short of forecasts of -15.0. A decent night ahead with the release of Prelim UoM Consumer Sentiment & Inflation Expectations.
EUR
The AUDEUR pair ticked slightly higher over night off the back some lacklustre ECB commentary following the interest rate announcement, reaching highs of 0.6288 before slightly dropping off to open up this morning at 0.6270. The ECB raised rates by 50bp, as was universally expected prior to the recent banking crisis, citing the fact that inflation was projected to remain too high for too long. They were otherwise somewhat dovish as inflation forecasts were lowered and there was no mention of future rates guidance. They also added that recent uncertainty reinforced the need for a data dependent approach and they stood ready to respond to risks to price stability and financial stability. European Equites closed the session higher with DAX +1.6% and CAC +2%. A quitter night ahead with only the release of the Final CPI y/y and Core CPI y/y, both expected to remain flat.
GBP
A data quiet session paired with improving risk sentiment allowed the AUDGBP to rally close to 40 points to reach highs of 0.5522 before opening slightly lower this morning at 0.5495. British Equites closed higher with the FTSE +0.9%. No data out for the GBP yesterday and only Consumer Inflation Expectations out tonight, previously reading at 4.8%. Nothing else noteworthy until Wednesday’s CPI y/y.
NZD
The AUDNZD pair saw a decent rally after the GDP miss yesterday reaching highs of 1.0800, before slightly dropping off, but still opening higher at 1.0750. No other data out yesterday, no data out today, and nothing of note out until Tuesday’s Trade Balance and Credit Card Spending y/y.