US Retail Sales Disappoint in June
AUD
The Aussie Dollar opens this morning flat against most majors apart from the Kiwi, after what was a quiet night with only the CB Leading Index m/m released, arriving better than expected at 0.1 for May 2023. Asian equities traded mostly in the red with the Hang Seng down 2%, while the Nikkei was the only to gain, trading up 0.3%. The ASX slid 0.2% for a second day as Real Estate stocks declined 1.6%. Commodities followed suit remaining largely down with Iron Ore - 0.1%, Silver -0.1% Copper -0.3%, and Gold was flat. No major news of note today, with only the MI Leading Index m/m set to be released later this morning. We may also have the Foreign Direct Investment ytd/y data out of China, but that is tentative. Focus remains on tomorrow, where we'll see Employment Change and Unemployment Rate data. While the Unemployment Rate is expected to remain flat, Treasurer Jim Chalmers & many economists expect this to increase in the coming months provided inflation continues to ease & the economy slows. This could be what bankers are looking for to reduce upside risks to wage-price pressures.
USD
The AUDUSD traded sideways overnight despite positive CB Leading Index m/m data, opening this morning relatively flat at 0.6813. No positive news for the Greenback with a myriad of data being released overnight; particularly, Core Retail Sales m/m, and Retail Sales m/m both came through worse than expected, further cementing expectations that USD strength has reached its peak. Another strong night for risk sentiment saw the Dow Jones +1.3%, the Nasdaq +1.1% and the S&P 500+.9% all performing well. We have some data set to be released overnight with Housing Starts, Building Permits, and Crude Oil Inventories, none of which typically move markets.
EUR
AUDEUR opens flat this morning at 0.6066 with no news out the Eurozone last night. European markets however pushed higher and reversed losses with the CAC and DAX gaining around 0.4%. Looking forward, today we have the Final CPI y/y, Final Core CPI y/y, and German 30-y Bond Auction(tentative) set to be released later this evening.
GBP
The AUDGBP rallied overnight, regaining its 0.52 handle to open at 0.5225. We also saw the FTSE come through up 0.6%. No major news out of Great Britain yesterday with only 30-y Bond Auction coming through at 4.48|2.3. Today's focus remains on the CPI y/y, forecasted at 8.2%, as price pressures continue to cause headaches at the Bank of England. Notably, almost every UK CPI figure has exceeded expectations this year, therefore volatility is expected later this afternoon.
NZD
The AUDNZD saw a slow rise since yesterday reclaiming its 1.08 handle, after a volatile morning with the CPI q/q results coming through better than expected at 1.1% (down from last quarter's +1.2%, yet above today's expectation of +0.9%), opening at 1.0840. We saw a 66bps drop in the immediate aftermath, which didn't take long to rebound. No other data for the remainder of the week.