China Expected to Hold Rates Given Economic Improvement

AUD

The Aussie dollar opens slightly up against majors after yesterday's RBA Meeting Minutes showed Aussie central bankers left the door open to potential future interest rate hikes (depending on incoming data). Asian equities ended its session mostly lower with Nikkei at -0.9%, with the exception of Hang Seng closing at +0.3%. To commodities, crude oil continued to climb by +0.1%, whilst gold and silver fell by -0.1% and -0.2% respectively. Today, the People's Bank of China will announce the Loan Prime Rates (LPR) at 11:15am. The 1 and 5 Year LPR is expected to remain at 3.45% and 3.45% respectively, given recent growth in retail sales and industrial production figures. However, we may see another policy rate cut in Q4, which could introduce fluctuations with the Aussie Dollar.

USD

AUDUSD opens slightly higher at 0.6457, coming off the big miss for US Housing Starts numbers yesterday which arrived at 1.28M against expectations of 1.44M. Over on Wall Street, equities saw slight drops with the Dow -0.3%, Nasdaq -0.25% and S&P 500 -0.2%. Today, there isn’t any major data coming out of the US Market, with focus on the Fed interest rate decision early tomorrow morning – including the FOMC Statement and Press Conference. The central bank is expected to hold rates at 5.5%, although any changes in Chairman Powell’s tone throughout may introduce volatility for the AUDUSD air as the market prices in any unexpected dovish or hawkish tones.

EUR

AUDEUR inched higher at 0.6045, off the backbones of Europe’s lower-than-expected Current Account numbers – expected at 30.2B, but printing about 33% lower at 20.9B. Over in the Europe equity markets, the CAC opened slightly green at +0.1%, and DAX in the red at -0.4%. At 4pm today, the German PPI month on month data will come out, expected at 0.1%, which will give an idea of consumer inflation coming from the German manufacturers. The main focus will be on the French and German Flash Manufacturing and Services PMI’s, which will come out on Friday.

GBP

AUDGBP opened flat at 0.5208 with no significant data coming out overnight. In the UK equities market, the FTSE opened slightly higher at 0.1%. Today, the headline inflation data is released at 4pm, with expectations of 7.0% for the year-on-year CPI. This leads into the Bank of England rate decision on Thursday, where a 25bp hike is expected to raise the bank rate to 5.50% from 5.25%. 

NZD

The AUDNZD rate opened slightly lower at 1.0867, with New Zealand’s Current Account coming in better-than-expected, at -4.21B versus -4.55B. The main event for the NZD is the NZ GDP quarter-on-quarter, set to be released Thursday 8:45am with forecasts of 0.4%, against the previous figure of -0.1%.