ECB Raise Rates by 25bps, as Expected
AUD
The Aussie dollar is mixed across the board, seeing a fall against the USD and Kiwi and gains against the other majors. Yesterday, Australian Import Prices came in at expectation, seeing a -0.8% fall. The ASX saw a +0.7% gain and AUD linked commodities were flat. Today, PPI q/q is released, expecting a 0.9% increase, and Retail Sales m/m expecting no change. A quiet weekend ahead for the Aussie but next week on Monday we have the MI inflation gauge m/m, and Manufacturing and Non-Manufacturing PMIs out of China.
USD
The AUDUSD pair fell 0.7% on this time yesterday’s level after a small rally throughout the day, opening at 0.6711 this morning. Unemployment Claims from the US came in much better than expected and GDP q/q came in far higher than expected at 2.4% versus the 1.8% expectation. This strong data spurred US strength overnight. Tonight, Core PCE Price Index m/m is being released, this data piece is the Fed’s preferred measure of inflation for the states, with current market expectations being +0.2%. At midnight tonight UoM Consumer Sentiment is also released.
EUR
The AUD is up slightly on the Euro since this time yesterday, the pair rallied to a high of 0.6141 overnight before falling to 33bps to 0.6108. There was a fair bit of volatility in the Euro overnight with the ECB’s interest rate announcement. The EU’s central bank raised the rate by 25bps to 4.25%, in line with market expectation. Lagarde said in the press conference that near-term economic outlook has deteriorated, and their manufacturing output is being held down by weak external demand. She went on to comment that growth for the EU is to remain weak in the near term but then strengthen in the medium to long term. Today prelim CPIs m/m for Germany and France are being released, expecting a 0.3% and 0% respectively. Spanish Flash CPI y/y is also being released, with an expectation of 1.7%, versus the previous 1.9%.
GBP
AUDGBP is up slightly, gaining 0.45% overnight, currently sitting at 0.5237. Minimal data from the UK in the later half of this week. CBI realized sales was released last night, showing a massive miss at -25, versus a -9 expectation. Next week the BOE have their next interest rate announcement, with markets predicting a 25bp increase as the most likely outcome.
NZD
The AUDNZD fell slightly over night, touching one-week lows before recovering slightly to 1.0843. Australian Prime Minister Albanese has been in New Zealand since Wednesday discussing trade and economic ties with his New Zealand counterpart Chris Hipkins. No economic data from New Zealand until Monday with the ANZ business confidence being released.