China Moves to Support Growth
AUD
The AUD takes a hit against all the majors, seeing a drop from a shift in global risk sentiment and weaker releases from potential Chinese stimulus. Commodities were a mixed bag, with Oil and Nat Gas both closing up over 2%, with Gold down 0.3%, Silver down 0.8%, Iron ore down 1.1% and Copper down 0.7%. Asian equities saw light gains, with the ASX closing up 0.7% and the SHANGHAI COMP closing up 0.2%. Chinese Loan Prime Rates drop slightly more than expected, with the 1-y shedding 20bps to 3.10% and the 5-y dropping 25bps, both being 5bps more than expected. Despite these rate cuts, markets were expecting from earlier announcements a stronger effort from China to force growth back into the struggling economy, with these cuts being only a piece of what was expected. We also had RBA Deputy Governor Andrew Hauser speak, saying that the response of market interest rates to recent data was encouraging. Looking forward, it is quiet until global PMIs on Thursday.
USD
The AUDUSD takes a tumble to start the week, dropping to a monthly low overnight, opening this morning at a rate of 0.6657. Wall Street saw a softening into the close, with the DOW JONES down 0.8%, S&P 500 down 0.4% and the NASDAQ closed flat. It was a quiet news day yesterday, with the drop attributed to US Treasury yields rising on sliding expectations of Fed cuts. Tonight, there is FOMC Member Harker speaking and the Richmond Manufacturing Index expected to rise by 2 points to -19.
EUR
The AUDEUR saw small losses overnight, with the pair shedding most of its gains overnight, opening this morning at 6156. European equities took a hit yesterday, with both the DAX and CAC closing down 1%. It was a quiet start to the week, with the German PPI m/m dropped to -0.5%, expectations that it would remain at -0.2%. Tonight will be similarly quiet, with IMF meetings kicking off tonight; with all eyes on Thursday nights PMI releases, seeing 6 different data points being printed within an hour, it may give some volatility to the currency pair.
GBP
The AUDGBP sees mild losses within the past 24 hours, with most of the losses occurring during the morning session, with a stable pair overnight, opening this morning at 0.5123. British equities finish in the red, with the FTSE closing down 0.5%. Yesterday saw the Rightmove HPI m/m come in lower at 0.3% from 0.8%. BOE Gov Bailey is set to speak overnight at the Bloomberg Global Regulatory Forum, with any comments or insights into future policy likely to impact GBP strength.
NZD
The AUDNZD opens the day flat, with the pair keeping relatively stable since yesterday morning, opening this morning at 1.1040. to the news, yesterday Credit Card Spending y/y come in at -3.2% from -3.1%, and Trade Balance Lowered 198m to -2108M. There is no news to be released tonight, with the next piece being RBNZ Gov Orr Speaking about monetary policy at Washington DC, with commentary around future RBNZ policy likely to influence NZD strength.