Chinese Data Paints Mixed Picture
AUD
The Aussie Dollar kicks off the week mixed / near flat against major currencies, with a slide in Iron Ore prices on Friday paired with mixed Chinese economic figures (counteracting Australia’s strong employment data on Thursday which stopped recent AUD bleeding). Asian equities finished the week with a strong performance on Friday as the Shenzhen and Hang Seng each pushed 3.6%. The ASX slid -0.9% as Utilities slumped -3.5% and Real Estate -2.0%. On Friday, China reported better-than-expected Retail Sales and Industrial Production figures for September. While there are some encouraging signs for Australia’s biggest customer, it’s hard to say they’re out of the woods in terms of weak domestic demand, the struggling housing market and slowing export growth. Their GDP figure printed on-expectations at 4.6% quarter-on-year, being the slowest pace of growth since early 2023, with many calling for authorities to sharply ramp up sizeable policy stimulus. A spokesperson at Oxford Economics indicated "The recently announced stimulus measures could cushion the downside risks to next year's growth, but are unlikely to reverse the structural downturn." Later today, we’ll see the 1-year and 5-year Loan Prime Rate announcements from China, where each are expected to be cut by 25bps. RBA Deputy Governor Hauser will also be speaking at midday. Overall, it’s a very quiet week for Australian data, with Flash Manufacturing and Services PMIs set for release on Thursday morning.
USD
AUDUSD moved sideways over the past couple of days before jumping up a little this morning to kick off the week at 0.6711, being about 0.2% higher than Friday’s open. Another steady session to end the week saw US equity markets at all-time highs with the Nasdaq +0.6%, the S&P 500 +0.4%, and the Dow Jones +0.1%. We saw little US data on Friday, as well as little meaningful data ahead of Flash Manufacturing and Services PMIs on Thursday. A few FOMC Members will be speaking later tonight, although the dominant force impacting the USD at the moment remains the upcoming Presidential election. We may see more defensive flows into the USD ahead of November 5 as markets look to de-risk.
EUR
AUDEUR fell to 0.6165 lows over the weekend before retreating a tad to open today at 0.6175, being only a little lower than Friday morning. The DAX and CAC each gained +0.4% on Friday, where there was minimal economic data following the European Central Banks expected 25bps interest rate cut to 3.4% on Thursday. ECB President Lagarde sounded a bit more dovish than usual at the post-meeting Press Conference. She emphasised the ECB’s confidence in the disinflation path and that the focus has started to shift from inflation to growth. This evening, we’ll see German Producer Price Inflation (PPI) figures. Lagarde will be speaking again on Wednesday morning.
GBP
AUDGBP traded sideways over the past few days, seemingly undeterred by the strong UK Retail Sales figure on Friday which showed consumer spending increase by 0.3% in September (expectations were a -0.4% drop). The pair opens flat at 0.5138. The FTSE fell -0.3%. Minimal UK data over the next two days. Bank of England Governor Bailey will be speaking twice ahead of the Flash PMI figures on Thursday.
NZD
ADNZD opens flat at 1.1048, having made no major moves last week with no Kiwi economic data since Wednesday. This afternoon, we’ll see Credit Card Spending y/y for NZ. The main event this week will be RBNZ Governor Orr’s talk on monetary policy, on Thursday morning.