Strong Labour Report Boosts Chances of Rate Hike
AUD
Improved risk sentiment and strong Aussie employment data gave the AUD room to stretch its legs overnight, seeing modest gains against majors. The Unemployment Rate fell to 3.5%, back below its 12-month average, Employment Change data also saw a gain of 32.6k versus the 15.4k expectation. NAB business confidence was also released, showing a slightly more positive number of -3 vs -4. The ASX was flat and Asian equities were down, with the Shanghai Comp losing just under 1% and the Nikkei losing 1.2%. No major moves in AUD linked commodities. No data until Monday morning when Flash Manufacturing and Flash Services PMIs will be released.
USD
The AUDUSD pair gained 1% over night, touching a one-week high at 0.6847, before falling down to open at 0.6780. US unemployment data was also released last night, coming much better than expected, pushing other currencies down, while the Aussie dollar returned to the previous day's levels off the back of this news. Unemployment Claims decreased by around 11,000. The Philly Fed Manufacturing Index came in worse than expected but better than previous at -13.5 (-10.1 expected and -13.7 previous), although this data was largely ignored by markets. US Equities were mixed, showing no strong overall trend. No data this evening.
EUR
The AUDEUR pair is up this morning, gaining 0.8% since this time last week, currently sitting on 0.6089. Last night German PPI m/m came in slightly better than expected at -0.3%, while the Current Account for the Eurozone showed a massive above expectation figure coming in at 9.1B versus the 2.5B expected. Humble gains on the DAX and CAC, gaining 0.6% and 0.8% respectively. The EU Economic Forecast report is the last piece of data due for the Eurozone this week. The Spanish Parliamentary Election is also this weekend. French, German and Eurozone Flash Manufacturing & Services PMIs will be released on Monday.
GBP
The AUD gained 0.45% against the GBP over the past 24 hours, reaching a high of 0.5302 at 9pm last night before trailing off, before falling to the current level of 0.5267, being around a 2-week high for this currency pair. Bank of England member Ramsden spoke at a Finance event in London, hinting at further rate hikes for the UK, “If there is evidence of more persistent pressures, then further tightening in monetary policy would be required”. Ramsden noted that the BOE will have reduced its stock of gilts and corporate bonds by a total of £100 billion by October. However, the central bank now has almost completely run off its portfolio of corporate debt, potentially giving it space to sell more government bonds, he said. Ramsden said the MPC will announce the pace of QT in its second year at the start of October. The last major piece of UK data this week is Retail Sales m/m tonight, expected to see a slight drop from a 0.3% gain previously to a 0.2% gain. UK Flash Manufacturing and Service PMIs will also be released on Monday.
NZD
AUDNZD pair gains 0.6% overnight, touching 3-week highs of 1.0901 before falling back to the current level of 1.0868. No data for the rest of the week from across the ditch, while New Zealand Trade Balance and Credit Card Spending y/y will be released first thing Monday morning.