China Holds Rates Amid Pressure on Yuan
AUD
The Aussie Dollar dropped against most majors over the past 24 hours, with commodities following suit with Gold down 0.1%, Silver down 0.6%, Copper down 0.9%, but Iron Ore seeing 1.4% gains. Asian equities were mixed into the close with the ASX closing up 0.7% and the Shanghai Comp down 2.7%. Chinese Loan Prime Rates came out yesterday unchanged, with the 1-y remaining at 3.45% and the 5-y remaining at 4.20%, despite recent data underscoring the uneven nature of China's economic recovery and deflationary pressures pushing up real borrowing costs. The Chinese economy has struggled to regain its fervent growth it had displayed before covid, and an easing of these interest rates would have been a sign that they are looking to boost economic output. The holding of these rates shows that the PBOC believes that the economy is resilient enough to grow without the easing of the rates... For the time being. Today, we have the NAB Business Confidence coming out at 11:30 today, no forecasts as of yet and previously at -9.
USD
The AUDUSD dropped lower yesterday, with the pair breaking through the 0.66 barrier around midday, sliding into this morning’s open of 0.6569. Wall Street saw mild gains, with the S&P 500 closing up 0.2%, with the NASDAQ and Dow both closing up 0.3%. There was CB Leading Index m/m released last night, coming in higher at -0.1%, from an expected -0.3% and a previous -0.5%. Tonight, we have the Richmond Manufacturing Index, expected to increase from -11 to -7.
EUR
The AUDEUR dropped over the past 24 hours, seeing a steady decline all day with a brief rally in the late afternoon before returning downward to this morning’s open of 0.6037. The European equities where green into the close with the DAX up 0.8% and the CAC up 0.6%. To the news there was nothing released yesterday and there will be nothing today, which is the quiet before the storm of PMI data that will be released on Wednesday.
GBP
The AUDGBP had a poor performance yesterday, with the pair flirting with the 0.52 barrier just after open then fell into a steady decline for the remainder of the day into this morning’s open of 0.5167. The UK equities were soft into the close with the FTSE closing up 0.3%. To the news there was nothing released yesterday, and today we only have one piece of data out tonight being Public Sector Net Borrowing, expected to decrease from a 13.4B to 11.4B.
NZD
The AUDNZD had a fairly flat trading day yesterday, with the pair pushing higher early this morning to break through the 1.08 barrier to this morning’s open of 1.0817. There was no news out of NZ yesterday, but this morning at 8:30 we have the BusinessNZ Services Index which came in lower at 48.8 previously at 51.2. No further data out today.