AUD Starts Strong Ahead of Tomorrow's RBA Decision
AUD
The Aussie finished the week strongly, opening higher against the majors, boosted by Friday’s minimum wage hike after a shaky start to the week. The Aussie received a reprieve on Friday after the country’s fair work commission determined a 5.75% pay raise for workers on awards and an 8.6% increase for the lowest paid employees. Due to the wage increases, the markets are now split on whether the RBA will raise rates tomorrow, after previously leaning towards a pause. Asian equities also saw strong results with the Hang Seng up +4%, and the ASX +0.5% thanks to commodities Nickel, Iron Ore, and Copper all putting up multi percent gains. Looking forward to the news we have some minor data to be released later this morning with the MI Inflation Gauge m/m, ANZ Job Advertisements m/m, and the Company Operating Profits q/q, alongside with some news out of China with the Caixin Services PMI. Looking forward on the week we have a big day tomorrow with the Cash Rate set to be released. Beyond tomorrow's rate decision, Wednesday also will reveal the GDP figures for Q2 in what is a very busy week for Aussie data.
USD
The AUDUSD opens higher this morning at 0.6602 still riding improved risk sentiment, rebounding commodity prices and the U.S averting a debt default, pulling away from a six-month low of 0.6459. We had the US Non-Farm Payrolls for May come in at 339k up from a positively revised 294k, better than expectations of the forecast 195k. While we saw the unemployment rate rise to 3.7% from 3.4%, coming in higher than expectations of 3.5% with participation rate unchanged at 62.6%. Wall Street remained strong closing with the Dow Jones +2.1%, S&P 500 +1.5%, and the Nasdaq +1.1%. US data starts the week with Final Services PMI, ISM Services PMI, and Factor Orders m/m all set for release tonight.
EUR
The AUDEUR is now touching two-week highs opening this morning at 0.6167. Friday's data showed the French Industrial Production m/m come through at +0.8% after the previous month of -1.1%, in Spain the number of unemployed also fell by 49,260 people in May and stood at 2,739,110, the lowest figure since 2008. European equities remained strong with the DAX and CAC up 1.2%, and 1.9% respectively. We have a myriad of data set to be released today with the German Trade Balance, and Eurozone Services PMI, and also ECB President Lagarde will speak in the evening.
GBP
The AUDGBP has improved to 10-day highs opening this morning at 0.5304. The FTSE closed up at +1.2%, illustrating the improved risk sentiment across markets with the prospect of interest rate hike cycles coming to a conclusion. To the data we have yet another quiet day with only the Final Services PMI set to be released later this evening.
NZD
The AUDNZD continues its rise over the weekend opening higher this morning at 1.0896. No news out of New Zealand today as it is a Bank Holiday for the King’s Birthday, however looking forward to tomorrow we have the ANZ Commodity Prices m/m set to be released.