Today: All Eyes on Aussie Inflation Report
AUD
The Australian dollar opens lower this morning against all major currency pairs except for the GBP. Asian equities also closed lower as risk sentiment sullied, with the ASX -0.5%, Shanghai Comp -0.4% and the Nikkei -1.1%. Commodities were mainly lower on close with Natural Gas -9.3%, Gold -0.8%, Silver -1.2%, Iron Ore -0.6%, Copper -0.7% and the only commodity higher was Crude Oil gaining 1%. A quiet day yesterday with only the release of China’s CB Leading Index m/m which moved from a previous reading of -0.5% to -0.3%. All eyes today will be directed to Australia’s monthly CPI indicator for August. In year-ended terms, headline inflation will likely strengthen to 5.2%, given strong increases among fuel, electricity and gas prices as inflation remains persistent. A surprise print in either direction could sway the Aussie dollar.
USD
The AUDUSD lost the 0.64 handle overnight, reaching lows of 0.6387 before opening this morning at 0.6396. Wall street also suffered losses, closing lower with the Dow Jones -1.1%, S&P 500- 1.5% and NASDAQ -1.6%. August New Home Sales fell by 8.7% to 675k, worse than expectations of a 2.2% decline to 698k, though there were positive revisions. US Consumer Confidence for September fell to 103.0 to come in weaker than expectations of 105.5, though again there were positive revisions. However, Richmond Manufacturing Index came in better than an expected -6 at 5. A slightly quieter night ahead with US durable goods orders for August which will provide an indication of how inventory levels, manufacturing activity, and business investment are trending in 3Q23.
EUR
A lack of data from the Eurozone saw the AUDEUR open only slightly lower this morning, trading within a 30-point range overnight with no drastic movements. European equities closed lower last night with the DAX -1% and CAC -0.7%. No data yesterday, although tonight we will see some mid/low-tier data releases in the form of German GfK Consumer Climate, M3 Money Supply y/y, Private Loans y/y and German 10-y Bond Auction. All unlikely to influence currency markets.
GBP
The AUDGBP holds steady, remaining around 2-month highs to open this morning flat at 0.5262. British Equites also remained flat overnight as a lack of local data stagnated both equities and currency markets. The only data release came in the form of 10-y Bond Auction which seldom effects markets. No more data until Friday.
NZD
The AUDNZD lost over 60 basis points in yesterday’s session, giving up the 1.08 handle to open this morning lower at 1.0751. No data yesterday or today, however, tomorow we will see the New Zealand’s only data release for the week in the form of ANZ Business Confidence.