AUD Rides Improved Risk Sentiment Higher
AUD
The Aussie dollar enjoyed some respite over the weekend session, starting the week higher across the major currency pairs. Asian equities saw a mixed performance on Friday, with the ASX +0.9%, Shanghai Comp -3.1% and Nikkei +0.7%. Commodities followed the trend with Crude Oil +1.7%, Natural Gas -3.2%, Gold +1.4%, Silver +1.3%, Iron Ore +1.9% and Copper -0.8%. On Friday we saw Aussie Flash Manufacturing and Services PMIs, with Manufacturing coming in slightly higher and Services coming in slightly lower than previous readings, little reaction from the markets. A slow start to the week with no data out today, Tomorrow we will see China’s CB Leading Index m/m. In what is the major local piece of economic data for the week, Wednesday offers October’s CPI figures, followed by Governor Bullock’s speech on Thursday.
USD
After seeing lows of 0.6470 on Friday evening, the AUDUSD opens this morning higher at 0.6528 as a general risk-on mood permeated markets and helped the AUD gain the upper hand. Wall street capitalised on the buoyant mood, ticking higher on Friday to close with the Dow Jones +1%, S&P 500 +0.3% and Nasdaq +0.2%. To the data, and over the weekend we saw the November Services PMI rise to 57.0 compared to forecasts of 55.0 with Manufacturing PMI rising to 48.8 marginally short of forecast of 48.9. The combined results saw the Composite PMI increase to 55.3, beating the forecasted 54.3. Also released, was the University of Michigan Sentiment Survey for November, which was revised down to 71.8 from 73.0, weaker than forecasts of a positive revision to 74. Looking ahead, the US will also see a quiet start to the week with the first data release of note being Tuesday night’s CB Consumer Confidence, followed by the S&P/CS Composite-20 HPI y/y and the Richmond Manufacturing Index.
EUR
An array of disappointing European data on Friday has pushed the AUDEUR northward, touching 17.5 month highs of 0.6262 before slightly dropping off to open this morning at a healthy 0.6237. European equities also ticked higher with DAX +0.9% and CAC +0.6%. On Friday we saw Preliminary French and German PMIs missed forecasts across the board – composite measures reading 44.8 (48.3 exp.) and 47.3 (48.7 exp.) respectively. Eurozone equivalents told a similar story at 48.1 (50.0 exp.) while comments from the ECB’s Guindos saw the market price a 50% chance of a 50bps cut at the ECB’s December meeting as the EUR continued to lose favour. Another quiet start to the week, as we only expect the release of the German ifo Business Climate today. Next major release will be Thursday’s German Prelim CPI m/m.
GBP
The AUDGBP touched 2-month highs of 0.5199 before slightly retracing, opening in the green this morning at 0.5188. British Equities also closed in the green on Friday with the FTSE gaining 1.4%. On Friday night we saw 3 high-tier data releases all falling short of market expectations. With Retail Sales m/m, Flash Manufacturing PMI and Flash Services PMI all missing the mark. Looking to the day ahead we only await speeches from MPC Member Lombardelli and Dhingra.
NZD
The AUDNZD touched 2-year heights of $1.1180 before shedding around 30 pips to open this morning at $1.1150. No data out on Friday, no data out today. However this week’s main event for the Kiwi’s comes in the form of the RBNZ’s Statement of Monetary Policy on Wednesday, where they are expected to cut by 50 basis points from 4.75% to 4.25%.