AUD Range Bound
AUD
The Aussie Dollar falls across the board as risk sentiment fell-off overnight with weak economic data released yesterday. This shift was seen in the Asian equities with the ASX 200 down 0.5%, Hang Seng down 1.4% and the Shanghai Comp down 0.7%. Metals felt the pinch too with Gold and Silver down 0.3% and Copper down 0.9, with only Iron Ore keeping its head above water being up 0.1%. The Main piece of data out yesterday was Caixin Services PMI out of China, coming in under the forecasted 56.2 at 53.9, also lower than the previous reading of 57.1. This is a major indicator of economic growth in China, showing economic output in China is expected to decline more than forecasted for Australia’s largest trading partner, knocking our economic outlook. OPEC Meetings commenced yesterday, with little mentioned in the media so far, more information is bound to be released as the meetings continue throughout the week, giving insight into Oil reserves and future expectations, being major contributors to inflation worldwide. Looking forward we have the Trade Balance due to be released at 11:30am, expected to be at 10.85B, from a previous 11.16B.
USD
The AUDUSD smoothly slides from yesterday morning, opening today at 0.6653, sitting in the bottom of its weekly range. Wall St. remained lower into the close with Dow Jones down 0.4%, while both the Nasdaq and the S&P 500 were trading down 0.2%. To the news, FOMC meeting minutes were released overnight, showing that all members saw a pause in the hiking cycle as “appropriate or acceptable”, though some favoured a hike. Almost all officials expected further increases in 2023 however as core inflation had not shown a sustained easing since the start of the year. Tonight, we have ADP Non-Farm Employment Change forecasting a fall from 278k to 226k, and the Unemployment Claims set to increase from 239k to 247k. Notably, tomorrow evening’s Unemployment Rate data is expected to show a fall by 0.1% to 3.6% as firms continue to grapple with labour shortages. No doubt the Fed will keep a keen eye on these figures in the interest of avoiding a wage price spiral.
EUR
The AUDEUR fell hard yesterday morning, finding some support to rally overnight to open at 0.6129. European equities were offered into the closing bell with the DAX losing 0.6% on the day while the CAC lost 0.8%. PMI data was released from the eurozone yesterday, with most hitting expectations, while the biggest miss came from the Spanish Services PMI, expected at 55.8 and coming in at 53.4. French Industrial Production m/m saw an increase from last month’s reading and expectations, coming in at 1.2%. Today we have the Eurozone’s Retail sales m/m, forecasted at 0.2% from previous reading of 0%.
GBP
The AUDGBP follows suit, falling in a steady fashion since yesterday morning into today, opening at 0.5236. Equities faired no better with the FTSE closing down 1%. It was a quiet day for the news with one piece of data released yesterday, being Final Services PMI came in at expectations of 53.7, being in line with the previous reading. Tonight, we have only one piece of data due for release, being Construction PMI, forecasted to come in at 50.9, under the previous reading of 51.6. The next major event will be the Bank of England’s Governor Bailey’s speech in France on Saturday, titled ‘Central Banks as Lightning Bolts for Crises’.
NZD
The AUDNZD pair dropped the 1.08 handle early yesterday morning, seeing a familiar slide into today’s open of 1.0772. There was one piece of data released out of New Zealand, being the ANZ Commodity Prices m/m coming in at -2.3%, below last month’s +0.4% increase. This release does not tent to move the market, as the tightly-correlated Australian commodity prices are usually released a few days earlier. There is further data to be released from NZ for the rest of the week, while next Wednesday we’ll see the RBNZ’s interest rate decision, where markets are expecting the central bank to hold at 5.5%.