Aus Employment Data, US PPI and ECB Rate Decision

AUD

The AUD open up somewhat flat across the board this morning with the exception of the AUDNZD pair which opens lower. Asian Equities closed lower on Wednesday with the ASX -0.7%, Shanghai Comp -0.4%, and Nikkei 0.2%. Commodities on the other hand where mixed with Natural Gas +6.1%, Gold and Silver flat, Iron Ore -0.2%, and Copper also -0.2%. No data out locally or from China yesterday with the focus on today’s Australian Inflation Expectations followed by Unemployment data. Employment Change is expected to rise from -14.6k to 25.4k whilst the Unemployment Rate is expected to remain flat at 3.7% after last month's surprise uptick from 3.5%. No doubt the RBA will be keeping a close eye on this given consumer-driven inflation concerns.

USD

The AUDUSD remains attracted to the 64 handle, having briefly touched 0.6380 lows after yesterday's stronger-than-expected US inflation report, before opening today at 0.6420. Wall Street closed mixed yesterday with the Dow Jones -0.2%, S&P 500 +0.5% and Nasdaq +0.3%. The much-anticipated U.S. inflation data came and went with little impact as US CPI for August was generally as expected or marginally higher due to base effects and volatile energy prices. Headline inflation was 0.6% m/m as expected, though printed at 3.7% y/y against expectations of 3.6%. Core CPI was 0.3% m/m, coming in higher than expectations of 0.2% with the y/y result matching expectations of 4.3%.  Another busy night ahead with Retail Sales, PPI and Unemployment Claims expected to bring movement among currencies.

EUR

The AUDEUR saw lows of 0.5947 before opening slightly up this morning at 0.5982. European equities closed lower with DAX and CAC both -0.4%. Yesterday saw some low-tier data in the form of Italian Quarterly Unemployment Rate, Industrial Production m/m and German 30-y Bond Auction with mixed results seeing no major influence on the market. Today we have the ECB’s main event for the month with the release of the Eurozone’s Main Refinancing Rate. The General consensus and overall market view indicates that the ECB’s rate decision is likely to remain on hold at 4.25% (market pricing is for about 35% chance of a hike).  After its last policy meeting in July, at which the deposit facility rate was raised to 3.75%, the ECB clearly shifted into data-dependent mode for future policy decisions. 

GBP

The AUDGBP traded within a pretty tight range over yesterday’s session, opening flat this morning at 0.5142. British Equities also saw little movement with the FTSE closing flat. Yesterday we saw a string of mid-tier data which had mixed results offsetting each other causing little to no effect on the market. However, yesterday’s main event for the Brits was the release of their GDP m/m which fell -0.5% m/m, worse than the expected -0.2%. No more major data for the GBP until next Wednesdays CPI y/y.

NZD

The AUDNZD pair saw a steady decline over yesterday’s session, losing close to 40 basis points to open lower at 1.0842. Yesterday morning we saw the release of New Zealand’s Food Price Index which came in at 0.5% versus the previous reading of -0.5%. Nothing else out until Friday’s  BusinessNZ Manufacturing Index.