Today's RBA Meeting Minutes May Reveal Clues to Potential Hikes

AUD

The Aussie dollar enjoyed a solid start to the week after Friday's significant losses. Asian equities were higher to open the week with the Hang Seng up 1.8% while the Nikkei added a modest increase of 0.1%. The ASX closed 0.3% higher with the best performing sectors being real estate and Tech. Commodities were also supportive of the AUD with Gold, Silver and Iron ore all up on the day. The local data for the week starts today with the RBA Board meeting Minutes however they take on a lesser importance given Governor Lowe's speech emphasising that the board would have “the benefit of an updated set of forecasts and scenarios” when deliberating about monetary policy. We also have a raft of data from China today, the most important of which is GDP for Q1 which is expected to show an increase to 4% from the prior quarter's 2.9%. Markets will be keenly watching this number to see how the disinflation story is progressing in China and whether or not the stimulus measure taken by PBOC are having meaningful effect. Other data from China today includes Fixed Asset Investment ytd/y, Industrial Production y/y, NBS Press Conference, Retail Sales y/y, and Unemployment Rate.

USD

The Australian dollar is flat against the USD this morning at 0.6701 after a relatively quieter session. Wall Street made slight gains overnight, with the Big three all rising buy 0.3%. US 2-year yields rose 10bps to 4.20% while Crude Oil fell 1.9% to $82.10 a barrel. In last night's data, the Empire State Manufacturing Index out of the US showed an improvement in sentiment amongst manufacturers in New York which gave the USD a temporary boost however it was unable to hold onto gains as the Aussie fought back. Only low-tier data due from the States tonight with Building Permits, and Housing Starts.

EUR

The Australian Dollar fought back last night after falling sharply last Friday, jumping to 0.6133 as I write this morning. The Euro weakness coincided with ECB President Christine Lagarde speech which warned that changes in the world economy induced by geopolitics pose a challenge to the European Central Bank and its peers. European equities opened the session higher with the CAC up 0.4%, and Eurostoxx 50 up 0.2% which is the highest close since December of 2007. We have plenty of data from Europe today including EZ Trade Balance, and the German ZEW Economic Sentiment being the main contributors.

GBP

The Aussie held ground against the Pound, opening at 0.5412 this morning in an uneventful session. The FTSE 100 followed its European counterparts higher, adding 0.5%. The UK data starts in earnest tonight with the labor force statistics. Specifically, the Claimant Count Change is expected to show a decrease of 2.5k welfare claims in the UK, with the Average Earning Index 3m/y expected to show a deceleration in earnings growth and the Unemployment Rate to remain flat at 3.7%. Tomorrow night's consumer inflation data will add to what is a busy week of data from the UK.

NZD

AUD retained the upper hand against NZD, continuing its strong run over the last 3 weeks, opening this morning at 1.0834 which is the highest its been since early March. The Australian Dollar strength comes against a backdrop of fears in New Zealand of a possible recession, with potential for the the central bank to raise rates again. Only the GDT Price index is released tonight ahead of Thursday's important CPI q/q.