Positivity Around US Debt Ceiling Negotiations
AUD
The Aussie dollar opens up largely flat against the majors, in line with a quiet day yesterday with no major movements overnight. Asian equities were largely higher on the close with the Hang Seng the star performer up 1.2% and the ASX underperformed finishing Monday’s session down 0.2%, led by real estate and financial stock losses, with all the major banks in the red. Commodities were down with Copper -1.5%, Gold -0.1% and Iron Ore down 0.4%. This morning we've had some early local data with the release of the purchasing managers' indexes for services and manufacturing. The Manufacturing measure showed no change from the prior month's reading of 48.0 (less than 50 means purchasing managers believe the industry is in contraction), however the Services measure remained in expansionary territory at 51.8, although down from the prior month's reading of 53.7. This is reflective of inflation stickiness in the Services sector, however the reduction in the services PMI number could be a good leading indicator that the stickiness is starting to give way to interest rate pressures.
USD
AUDUSD remains largely unchanged opening slightly down at 0.6650, due to a quiet day in data releases. A mixed session on Wall St as the NASDAQ closed at +0.5%, the Dow Jones -.4% and the S&P 500 flat on the day. Ongoing debt ceiling negotiations were the main headline yesterday with House Speaker McCarthy (a Republican) saying a deal was not reached though he believed the package being negotiated would be acceptable to the majority of House Republicans. Looking ahead we have the Flash Manufacturing PMI, Flash Services PMI, New Home Sales and Richmond Manufacturing Index set to be released overnight.
EUR
AUDEUR opens very slightly higher this morning at 0.6149, having traded a tight 27pip range in the last 24hrs. To the data and in a quiet session EU Consumer Confidence release for May printed at -17.4, worse than expectations of -16.4 although no reaction to the data. European equities closed lower with the CAC and DAX both down to the tune of 0.2%. A very busy day ahead with multiple data releases with French and German, Euro Flash Manufacturing/Services PMI and Current Account to be released later this evening.
GBP
AUDGBP opens slightly lower this morning at 0.6150, with confidence returning to the UK housing market as asking prices for British homes rising in May, by more than any other month this year as a better economic outlook and steadier mortgage rates offset the impact of the Bank of England's interest rates rises. The FTSE100 enjoyed the glimmer of economic positivity, closing up 0.2%. We have some notable data today with the Flash Manufacturing PMI, Flash Services PMI set to be released later in the evening.
NZD
The AUDNZD continues its downward trend opening lower this morning at 1.0580, with no news of note released yesterday. Another quiet day for our neighbours with no data set to be released today, however we have a big day tomorrow for the Kiwis with their Official Cash Rate, RBNZ Monetary Policy Statement, RBNZ Rate Statement, and RBNZ Press Conference set to be released tomorrow.