Stronger Retail Sales Numbers Support AUD
AUD
The Aussie opens higher this morning against the majors, riding higher on better-than-expected Retail Sales data yesterday coming in at 0.7% (vs 0.1% expected), allowing AUD to recover some of the week's prior losses. Precious metals on the other hand did not perform as well with Gold -0.1%, Silver -0.2, Copper -1.2%, and Iron Ore +0.6%. Asian equities finished the day mostly down as lead by the Hang Seng’s 1.6% fall, while the Nikkei was up 0.1%. The ASX finished flat as gains in financials and consumer discretionary were offset by losses in Materials and Real Estate. Today we don’t have any major data out of Australia with only the Private Sector Credit m/m set to be released later this morning at 11:30am, however at the same time we also have some data out of China to look out for with the Manufacturing PMI and Non-Manufacturing PMI.
USD
The AUDUSD opens higher this morning at 0.6620 after an early rally yesterday off of the back of the strong Retail sales data, then falling late last night after strong data out the US with Weekly Jobless Claims printing at 239k, below estimates of 265k. US GDP also came in at 2% for the first quarter, beating the prelim reading of +1.3%. These strong GDP numbers go a little way towards easing recessionary concerns around the US economy and support the case for further interest rate hikes. Wall St. was stable into the close with the Nasdaq closing -.1%, the S&P 500 +.2%, and the Dow Jones +.6%. We have a myriad of data set to be released later this evening with Core PCE Price Index m/m, Personal Income m/m, Personal Spending m/m, Revised UoM Consumer Sentiment, and Revised UoM Inflation Expectations.
EUR
The AUDEUR opens higher this morning at 0.6091, again riding on our strong Retail Sales data. Overnight we saw strong CPI results out of Germany and Spain at 0.3%, and 1.9% respectively. European equities were mixed heading into the close with the CAC +0.45%, and DAX flat. We have a busy day for data releases out of the Eurozone with plenty for market watchers to sink their teeth into, the highlights being the Core CPI Flash Estimate y/y, and the Unemployment Rate. The Eurozone Unemployment Rate is likely to have remained at a multi-decade low of 6.5%, supported by ongoing solid gains in employment, particularly in services sectors. If this was accompanied by a stronger than expected inflation reading, it could encourage the market to price in a higher chance of more than 2 additional hikes by the ECB.
GBP
AUDGBP opens higher this morning at 0.5247 rallying early in the morning, after MPC Member Tenreyro reiterated key determinants of British inflation such as wage growth and core goods prices are on track to slow, creating no need for further interest rate rises. The FTSE also saw a drop as it was down 0.3%. On to the news, we have the Current Account, Final GDP q/q, Nationwide HPI m/m and Revised Business Investment q/q set to be released.
NZD
The AUDNZD opens higher this morning regaining its 1.09 handle at 1.0908 after stronger ANZ Business Confidence data released yesterday seeing business confidence leap 13 points in June. We had no other releases yesterday, and for today there may be the release of RBNZ Statement of Intent which will give the RBNZ's objectives for the next 3 years.