Ahead: Aussie Wage Price Index & Chinese Retail Sales

AUD

The AUD is mixed against the majors over the weekend session. The tail end of last week saw worse-than-expected Chinese data, giving the Aussie dollar nothing to latch onto, with New Loans coming in at 346B versus the 790B expectation and 3050B previous, M2 Money Supply y/y also was worse than expected at 10.7% versus the 11% expectation. No major movements in the AUD linked commodities. Tomorrow, the Australian Wage Price Index for Q2 will be released, with markets expecting to see a 0.9% increase on last quarter, potentially adding further upward inflationary pressure. Also, the Monetary Policy Meeting Minutes will be released from the RBA’s last interest rate decision – whether this moves markets will depend on whether the minutes contain any sentiment of hawkishness that goes against the RBA’s current prevailing narrative of dovishness surrounding the last announcement.

USD

The AUDUSD slips further over the weekend, losing the 0.65 handle late Friday night, after reaching a low of 0.6486, currently sitting at 0.6496 on open this morning. Slightly higher-than-expected PPI data from the US spurred further greenback strength on Friday night, with m/m PPI coming in at 0.3% versus the 0.2% expectation. Prelim UoM Consumer Sentiment came in at expectation and UoM inflation expectations saw a slight drop at 3.3% versus the 3.4% previous. A quiet day of data for the US today, with no data releases until Tuesday night with Retail Sales m/m and the Empire State Manufacturing Index.

EUR

The AUDEUR pair is flat on Friday with a bit of oscillation around the current level of 0.5933. A few small pieces of data from the EU on Friday did little to move rates, French Final CPI m/m came in at 0.1%, and the Italian Trade Balance was well above expectation, coming in at 7.72B, vs the 4.23B expectation. The DAX and CAC fell 1% and 1.3% respectively. German Wholesale Price m/m is the only EU piece of data due today. French and Italian bank holidays for the start of their week this week. 

GBP

The Pound gained strength over the weekend after better-than-expected data from the UK on Friday, the AUDGBP pair fell 0.6% proceeding this data, sitting at 0.5108 this morning. GDP m/m was released on Friday evening, coming in well above the 0.2% expectation at 0.5%. Goods Trade Balance saw a slight boost, coming in at -15.5B versus the -16.6B expectation. Manufacturing Production m/m was up 2.4% instead of the expected 0.2%. No data out until tomorrow with Claimant Count Change, Average Earnings Index, and Unemployment rate is released all at the same time.

NZD

The AUDNZD continued to rise over the weekend, fueled by NZD weakness, currently sitting at 2-week-highs of 1.0845. This morning 2 pieces of NZ data was released, the BusinessNZ Services Index, coming in slightly worse than previous at 47.8, and Visitor Arrivals which showed an 11.3% increase. On Wednesday the RBNZ have an interest rate decision with an expectation that they hold rates at 5.50%.