Global PMIs Expected to Contract Tonight

AUD

The Aussie dollar opens down against majors this morning with largely poor results from the ASX and commodities yesterday. The ASX finished 1.4% lower with all 11 sectors finishing lower following hawkish rhetoric from the US Fed overnight. Asian equities took a tumble with the Nikkei down 1.4% and Hang Seng down 1.3%. Iron Ore gained 0.3%, with gold and silver flat. PMIs arrived mixed this morning with little impact on the Aussie Dollar. Notably, the services sector printed at 50.5 expanding from the previous 47.8. The RBA may keep an eye on this when considering price driven inflation. Next major piece of Aussie data will be our CPI y/y report next Wednesday.  

USD

AUDUSD opens lower at 0.6416, reaching lows of 0.6388 at 11:30pm last night before bouncing back above the 0.64 handle. This was following the US Unemployment Claims which arrived at the lowest level in 8 months, falling short of expectations at 201K and reflecting further resilience in the labor market. Wall Street traded through some key technical levels last night which saw the Nasdaq fall 1.7%, the S&P 500 down 1.6%, and the Dow Jones down 1%. Tonight, we have Flash Manufacturing and Services PMIs with further expansion expected in the services sector. Manufacturing is still expected in contractionary territory, although approaching the 50.0 level with an expected reading at 48.2. We’ll also hear from FOMC member Cook this evening, who is due to speak at an Artificial Intelligence conference in Toronto.  

EUR

AUDEUR has given up recent gains overnight, falling throughout the session to open at 0.6018. Equities also fell off in the Eurozone with the CAC and DAX down -1.6% and -1.3% respectively. Late this afternoon we have Flash Manufacturing and Services PMIs for France, Germany, and the Eurozone as a whole. All figures are expected in contractionary territory, yet relatively similar to the previous readings, as European businesses grapple with higher borrowing costs and wages.

GBP

AUDGBP opens slightly lower at 0.5219 despite a brief rally to 0.5232 last night after the Bank of England surprisingly kept interest rates on hold at 5.25% against expectations of a 25bps bump. This marks the end of 14 straight interest rate hikes after data showing inflation is now operating below expectations. The Bank of England had been continuously hiking interest rates since December 2021 to reduce inflation. Bank of England Gov Bailey attributed the pause to the recent downside surprise to UK inflationary pressures. He did, however, indicate any talks of future rate cuts would be premature at this point in time. Tonight at 6:30pm, we have the Flash Manufacturing and Services PMI expected to remain in slightly contractionary territory, not moving far from the previous readings.  

NZD

AUDNZD has lost ground over the past 24hs, steadily declining to open at a 1.0804 this morning. Light on meaningful data today ahead of a quiet period next week.