AUD Takes a Hit Amid Chinese Real Estate Fears

AUD

The Aussie dollar opens mostly flat across the majors, with an uneventful trading day yesterday leading to most pairs opening within a few pips of yesterday’s open. Metals saw solid gains, with Gold up 0.1%, Silver up 0.3%, Copper up 0.5% and Iron Ore up 0.8%. It was a different story for the Asian equities, closing in the red, with the ASX down -0.5% and the Shanghai Comp down 1.2%. To the news, there was crucial Chinese Loan Prime Rate data released yesterday, forecasting a 15bps drop on the 1Y and 5Y, with the 5Y remaining unchanged at 4.20% and the 1Y only receiving a 10bps decrease to 3.45%. With the struggling Chinese economy, rate cuts are trying to spur development and spark some growth, but the smaller cuts do show there may be deep debt wounds and are bleeding over the economy, keeping the Aussie dollar down with it. There is no data being released today, with the remainder of the week being light on data.

USD

AUDUSD continued to slide sideways yesterday, staying in a tight 34-pip range all of yesterday, opening this morning slightly higher at the top end of the range at 0.6414. Wall St. was stable into the close with the Nasdaq up 1.6%, the S&P 500 up 0.6%, and the Dow Jones down 0.1%. No data was released from the US yesterday ahead of tonight's Flash Manufacturing and Services PMIs which are expected to have a small downtick, with the manufacturing sector expected at 48.9 from 49 and services at 52.1 from 52.3. This data is a leading indicator of economic health, forecasting that the economy is cooling off in the US, and the rate hikes have been doing their desired result. With the back half of the week filled with more meaningful data, this week should give markets a clearer view of America's current economic health.

EUR

AUDEUR opens today slightly lower, after an unremarkable trading day, with the pair sliding sideways throughout yesterday to this morning’s open of 0.5884. European equities were green into the close, with the DAX up 0.2% and the CAC up 0.5%. It was a quiet news day for the Eurozone, with German PPI m/m reading lower at -1.1%, expected at -0.1% and previously at -0.3%. Today there is no data to be released out of the Eurozone; however, the ladder half of the week is crammed with crucial data, with a potential for volitivity with these data releases getting priced in.

GBP

AUDGBP opens marginally lower with the pair trading in a tight 23 pip range yesterday, opening this morning at 0.5025. UK equities followed suit, closing slightly in the red, with the FTSE down 0.1%. It was a quiet day for news out of the UK, with the only piece being Rightmove HPI m/m, reading lower at -1.9% from a -0.2%. Today is a similar note with CBI Industrial Order Expectations looking to decrease from -9 to -11; with the most important data for the week being released tomorrow, being the PMI’s expecting a small decrease.

NZ

The AUDNZD pair sees a marginal gain since yesterday, with small gains in seen in the afternoon, which were subsequently given back overnight, to this morning’s open of 1.0817. The Trade Balance was released yesterday morning, with a large miss, reading -1107m, expected at -50m and was previously -111M. Credit Card Spending y/y also came in under, at 3.6% previously 5.1%. No data will be released today, while eyes remain on tomorrow's quarterly Retail Sales figure, expected to show a -0.4% decline.