Aussie Labour Report to Provide Volatility?
AUD
The Aussie dollar continues its decline, opening down against the majors as risk remained off globally. Often used as a liquid proxy to the Yuan, the AUD is still reeling off the worse than expected news out of China. With risk sentiment off, and fears mounting about the extent of China’s slowdown, we saw a massive sell off among Asian equities with the ASX was down 1.5%, Nikkei off 1.5% and the Hang Seng down 1.35%. Commodities mostly followed suit with Gold down -0.4%, silver down -0.3%, Iron Ore up 0.3%. Today we have some major news with the Employment Change, and Unemployment Rate set to be released at 11:30am with expectations that there will be a slight 0.1% increase to the Unemployment Rate to 3.6%, which could further weaken the AUD.
USD
The AUDUSD drops further to open lower this morning at 0.6406, which has been the lowest since November 2022. Strong data out overnight further boosted the Greenback with Housing Starts, Industrial Production all performing as forecasted, and/or better than expected, while Capacity Utilisation rose from 78.6% to 79.3%, beating estimates of 79.1%. The FOMC meeting minutes were also released this morning with Fed officials seeing possible upsides to inflationary risks, which bolstered further rate hike expectations, and that only a minority of members saw an end to the current tightening cycle. Wall street however saw the Nasdaq close -1.1%, the S&P 500 -0.7%, and the Dow Jones -0.5%. We have some further data set to be released late this evening with Unemployment Claims, and Philly Fed Manufacturing Index being the main event.
EUR
The AUDEUR remains at 3-year lows dropping a further 20bps opening this morning at 0.5895. Some mixed data out of the Eurozone didn’t help with Flash Employment Change q/q underperforming, while Flash GDP q/q, and Industrial Production m/m came in as forecasted and better than expected. European equities were mixed with the DAX up 0.1% while CAC was down 0.1%. No major news to look out for today with only the Eurozone Trade Balance set to be released later this evening.
GBP
The AUDGBP plunges further, continuing the downward trend opening this morning at 0.5037. The AUDGBP pair remains at three-year lows after some strong data out of the UK with CPI y/y, and Core CPI y/y all performing better than expected. The FTSE followed suit coming through at -0.4%. No news set to be released out the UK today, however tomorrow we have the GfK Consumer Confidence set to be released.
NZD
AUDNZD pairing opens lower this morning at 1.0811 reeling off the RBNZ decision to hold interest rates yesterday. Early this morning we had some poor performing PPI data, with PPI Input q/q down 0.2% from the expected 0.4%, while PPI Output q/q came in 0.2% from the expected 0.8%. No further news from our Kiwi neighbours for the rest of the week.