AUD Holds Recent Gains
AUD
The Aussie Dollar has held onto recent China-centric gains, opening within a few pips of most majors relative to yesterday morning (higher against the Euro), with no major data announced yesterday outside of Chinese PMIs. The Chinese Manufacturing PMI was released slightly higher than expected at 49.8, highlighting that the manufacturing sector in China is recovering, although still contracting ever so slightly. Their Non-Manufacturing PMI printed at 50.0, indicating neither growth or contraction. China have their ‘Golden Week’ - a one-week tourism holiday ending on October 8. On equities, ASX closed +0.7%, Shanghai Comp +8.1% and Nikkei -4.8%. Commodities were mostly down across the board. No major data releases for the rest of the week on the Aussie Dollar. Locally, Australian Retail Sales m/m is expected to increase +0.4%, being flat in the previous reading, which will be released at 11:30am.
USD
The AUDUSD opens flat at 0.6917, touching 18-month highs of 0.6941 last night before retracting to current levels. Wall Street closed slightly higher with Dow Jones flat, S&P 500 and NASDAQ both at +0.4%. Last night, Chicago PMI released better than expected but still showing an economic contraction in the Chicago area. US Fed Chair Powell spoke last night, stating that interest rate cuts were coming but they were "in no hurry" to do so. This contradicted the previous narrative that an interest rate cut was definitely on the table for their next decision on November 7, causing a drop in the AUDUSD. Tonight will see Manufacturing PMIs, Job Openings and Manufacturing Prices released.
EUR
The AUDEUR opens higher at 0.6210, touching 10-week highs of 0.6225 last night before slightly retracing to current levels. The DAX and CAC closed lower at -0.8% and -2.0% respectively. The major data release for the Euro yesterday was German Prelim CPI m/m, which released at +0.0% (lower than expected). The release continues to highlight the economic stagnation in Germany – Europe’s largest economy. Key inflation expectations will be released tonight for the Eurozone, expected to be lower than previous levels.
GBP
The AUDGBP opens flat at 0.5169, touching 5-week highs of 0.5185 last night before coming back to current levels. The FTSE also closed -1.0%. There was minor economic data released yesterday, showing that the British economy was slowing down slightly. MPC Member Greene spoke overnight, indicating more interest rate cuts are likely as prices are "moving in the right direction". This comes amid concerns that a consumption-driven recovery in the UK could set off a renewed bout of inflation. Some minor data is due to be released for the rest of the week.
NZD
The AUDNZD opens flat at 1.0897, trading sideways between 1.0870 and 1.0907 throughout the course of yesterday. Important business confidence surveys from the ANZ and NZIER both showed that the future outlook for the NZ economy were more optimistic than previously surveyed. No more economic data or surveys for the rest of the week.