US Retail Sales and Chinese data both miss.

AUD

The AUD was down against the majors overnight, with downbeat local and Chinese data causing the Aussie dollar to be pressured southbound. Chinese Industrial Production posted at 4.6%, missing expectations of 5.7%, whilst Chinese Retail Sales were off by a wide margin, coming in at 18.4% instead of 22.0%. RBA Monetary Policy Meeting Minutes came and went without much reactions from markets. The key takeaways behind the RBA’s 25 bps hike from a fortnight ago were the effects of a recent migration "influx" on rent prices, which were expected to add to inflation pressures for some time. Additionally, strength in the job market, weak productivity growth and the rising rate of services inflation allowed the RBA the room for the hike. Yesterday, the Westpac Consumer Sentiment showed Australian consumer confidence had fallen to its lowest levels since April 2020, right as the effects of the global pandemic were beginning to be understood. Today MI Leading Index m/m is being released. But markets will be paying the most attention to the AUD Wage Price Index q/q, which is an input for consumer inflation, when labour costs increase this usually is passed onto consumers. This figure is expected to come in at 0.9%, up on the previous figure of 0.8%.
 

USD

AUDUSD lost -0.7% over the course of the day, opening at 0.6653, even with weaker US Retail Sales numbers. US equities traded lower overnight with concerns over the US debt-ceiling negotiations seeing the Dow Jones closing -1%, the S&P 500 -0.7%, and the NASDAQ -0.2%. Yesterday saw the release of US Retail Sales, which saw large amounts of volatility around the release. This figure came in at a 0.4% increase, well below the 0.8% expectation. Markets initially didn’t know how to react to the information, but eventually settled on buying pressure for the USD, taking the worse-than-expected retail sales as a sign of slowing growth, flocking to the USD as a safe haven. Later US industrial production m/m came in at 0.5% above the flat expectation, again adding to the US buying pressure. FOMC member Williams spoke at a monetary policy discussion, saying that the US still faced unacceptably high inflation. While Fed member Goolsbee spoke at the Atlanta Fed’s Financial Markets, indicating that the May decision was a close call and that he had not decided on anything for the June meeting. Key releases tonight include Unemployment Claims release, expecting a drop on last months. And the Philly Fed Manufacturing Index, due at 10:30pm tonight.
 

EUR

The AUD lost over -0.6% against the EUR overnight, opening up at 0.6125. The Euro initially weakened when the German ZEW Economic Sentiment posted, which printed well below expectation at -9 versus the -1 markets priced in. However, Eurozone Flash Employment Change q/q came in better than expected at 0.6% (0.4% priced in), whilst Eurozone Trade Balance was above expectations at 17 Billion Euros versus the 5.6 Billion expected. Tonight will see the release of Finalised CPI or Core CPI numbers for the Eurozone, which will be unlikely to sway markets given the Flash version of CPI has already posted.
 

GBP

The AUDGBP pair was down 0.5% over the past 24 hours, opening up at 0.5328. Worse than expected Employment data from the UK yesterday afternoon gave this pair a brief boost, however, the prevailing sentiment of a weaker Aussie pushed this pair downward across the session. Yesterday’s data saw the UK unemployment rate increase from 3.8% to 3.9%, whilst those claiming Unemployment increased from 26.5k to 46.7k, above expectations of 31.2k. Bank of England governor Bailey is speaking at 8pm tonight at the British Chambers of Commercial Global Annual Conference in London, with no other data to report on.
 

NZD

The Aussie is down 45bps against the Kiwi over the past 24 hours, opening up 1.0682 this morning. The Global Dairy Trade price index printed at -0.9%, versus 2.5% previous. No major reaction from markets. Tomorrow, PPI input and output is printing for New Zealand, both expecting a slight decrease – as well as their government’s Annual Budget Release.