Aus Labour Market Cools, Rate Cut Hopes Rise

AUD

The Aussie Dollar had a slightly better overnight session, opening higher against most major currencies bar the GBP, which opens flat. Asian equities closed mixed with the ASX -0.6%, Shanghai Comp +0.4% and Nikkei flat. Commodities also opened mixed with Crude Oil +2%, Natural Gas +0.1%, Gold and Silver both +0.2%, Iron Ore -1.3% and Copper +0.5%. Yesterday we saw the release of the Aussie Employment Change and Unemployment Rate. Employment Change printed at -65.1k missing forecasts of +15.4k, while the Unemployment Rate remained flat at 3.9%. This reinforces the market's view that recent RBA interest rate hikes continue to take meaningful effect, upping bets of RBA cuts later this year. Nothing on the cards today locally or out of China, besides today’s early morning release of the CB Leading Index m/m which rose from a -0.3% to +0.2%. The major release next week will be China's Loan Prime Rates, on Monday.
 

USD

The AUDUSD pair held on overnight despite seeing some positive US data releases, opening slightly higher this morning at 0.6572. Wall Street closed in the green with the Dow Jones +0.4%, S&P 500 +0.6% and NASDAQ +1.2%. Last night we saw US weekly jobless claims data do better than expected with initial claims falling to 187k compared to forecasts of 202k. Also released, and also positive, December Building Permits rose 1.9% to 1.495, beating expectations of a 0.6% increase to 1.476 while Housing Starts declined by 4.3% to 1.460, better than expectations of an 8.7% decline to 1.425. Less positive was the Philly Fed Business Survey for January which printed at -10.6, up from a negatively revised -12.8 and worse than expectations of -6.7. Tonight, we await the Prelim UoM Consumer Sentiment, which is expected to remain relatively flat at 69.8, we will also see the release of Existing Home Sales and Prelim UoM Inflation Expectations.
 

EUR

The AUDEUR pair saw a steady rally over yesterday’s session, opening this morning slightly higher at 0.6046. European equities closed higher yesterday with DAX +0.8% and CAC +1.1%. Again, no major data out for the Eurozone only seeing the Current Account which missed expectations of 30.9B, coming in at 24.6B. We also saw ECB Monetary Policy Meeting Minutes, which showed that the ECB is still far away from discussing rate cuts, and outlook is unlikely to change in the near future. Another quiet night, with only the release of the German PPI m/m as well as ECB President Lagarde speaking.
 

GBP

The AUDGBP remained relatively flat with minimal movement, opening this morning at 0.5162. British equites closed slightly higher with the FTSE +0.2%. A quiet data session for the British, only seeing the RICS House Price Balance which slightly improved from -41% to -30% beating expectations of -35%. Tonight, we will see the Retail Sales m/m which is expected to drop from 1.3% to -0.5%. We will also see CB Leading Index m/m which will be the last data release until Tuesday’s Public Sector Net Borrowing.
 

NZD

The AUDNZD saw a decent rally in yesterday’s session, opening higher this morning at 1.0750. This morning, we saw the release of the BusinessNZ Manufacturing Index which dropped from 46.5 to 43.1. We also saw Visitor Arrivals m/m come in -1.5% versus the previous -6.7%. Nothing else until Tuesday’s BusinessNZ Services Index. Wednesday will bring major quarterly data for the Kiwis.