Resilient Aussie Labor Force Gives AUD Leg-up

AUD

The Aussie Dollar opens with strength across the market, fuelled by strong macro-economic data and good gains in metals with Gold and Silver are both up 1.3%, and Copper up 1.2%. Equities keeping a tight range, with ASX and down 0.3% and the Nikkei up 0.3%. The main data yesterday was the AUssie labor force statistics which were more resilient than expected in the face of a higher interest rate environment. Employment change showed 52k new jobs were created in February, comfortably ahead of the forecast by 32.2k. The Unemployment Rate came in steady at 3.5%, beating the tipped worsenening to 3.6%, showing that the RBA rate hikes haven't yet inflicted too much damage on what continues to be a booming labour market. Looking ahead and no specific local data, however IMF and G20 meetings continue later today and may shed some light on how global economies will try to handle the economic downturns and banking collapses we have seen recently.

USD

AUDUSD continues to build upside momentum, opening higher at 0.6784, testing 8 week highs overnight close to 0.68. US equities had a good day, with Dow Jones closing up 1.1%, S&P 500 up 1.3% and NASDAQ leading the pack with 2% growth over night. To the US data and US PPI for March fell by 0.5% m/m compared to forecasts of a flat result while in y/y terms it rose 2.7% compared to forecasts of 3.0%. Core measures also generally came in lower than expectations. Released at the same time, weekly jobless claims data was largely as expected with initial claims rising slightly to 239k while continuing claims fell slightly to 1.810 mio. The disappointing US data releases are now starting to pile up and the damaging effects of the Fed's interest rate hikes are clear for all to see. Speculation is mounting that the peak interest rate scenario in the US is already here despite the Fed directly stating that more tightening is required. The big data week for the US continues with Retail sales m/m, Core Retail sales m/m both due tonight, along with FOMC member Waller who will be speaking later tonight.

EUR

AUDEUR opens this morning at 0.6138, just coming off the top of the overnight rally that peaked at one-week highs of 0.6147. Euro equities had some gains overnight with DAX up 0.2% and the CAC up 1.1%. Overnight the German Final CPI m/m matched the tipped 0.8%, failing to show  any signs of easing since last month’s reading, showing interest rate hikes may not be high enough to affect the Eurozone’s largest economy. The Industrial Production m/m for the Eurozone was 1.5%, beating expectations of 0.9%. This afternoon there is only low-tier data before the weekend with French final CPI m/m, tipped at 0.8%, in line with last month’s reading.

GBP

A similar story with AUDGBP, with a strong rally overnight, opening higher at 0.5413, just off the overnight highs of 0.5422. UK Equities closed slightly higher, with 0.2% growth in FTSE overnight. Keeping up with typical British fashion, a large macro-economic data dump happened all at once last night, with the most notable being Bank of England’s Governor Bailey speaking, and GDP m/m. Bailey spoke on the banking crisis, saying “The banking crisis is testing the institutional structures”. GDP m/m was tipped for growth at 0.1%, but came in flat at 0.0% showing economic growth has been stifled. Adding to this theme, both the Industrial Production and Manufacturing Production numbers were both worse than expected, showing either a complete lack of growth or even contraction. Looking ahead, MPC member Tenreyro speaks this Saturday, giving some insight on how the BOE is interpreting the new data at hand.

NZD

AUDNZD has opened flat at 1.0771, with a light rally overnight, to a high of 1.0813, falling off to 1.0745 then recovering back in line to yesterday’s open. There was no data that came out of New Zealand yesterday, and light data coming out this morning, with Business NZ Manufacturing Index at 48.1, and visitor arrivals m/m at 0.6%. No data is coming out later today or over the weekend. Recently resilient Aussie data keeps AUD on the front foot in the trans-Tasman rivalry for now.