US Economy Expands as Consumers Spend Big
AUD
The Aussie Dollar opens a little higher against the majors, experiencing a correction off the market's apparent overreaction to yesterday morning's hawkish Fed Dot Plot. It was very quiet locally yesterday with only MI Inflation Expectations coming in 4.2%. Asian equities closed mostly weaker, with the Nikkei -0.7%, Hang Seng -0.6%, while the Shenzhen made modest gains +0.1%. Locally, the ASX slumped -1.7%. Commodities closed mixed, Crude oil -0.9, Natural Gas +5.7%. Gold and Silver flat. Later today, out of China we will see 1-y and 5-y Loan Prime Rate decisions at 12:15pm which is forecasted to remain the same at 3.10%, and 3.60% respectively. Nothing out locally today. The next key event will be the Reserve Bank of Australia Meeting Minutes, on Christmas Eve.
USD
AUDUSD opens stronger this morning at 0.6236 after hitting highs of 0.6265 overnight despite US Final GDP q/q and Unemployment Claims coming out stronger than expected. The US economy expanded at a faster pace in the third quarter than previously estimated, owing in part to stronger consumer spending and exports. Q3 DSP printed at 3.1%, following the Q2 2.8% figure. The numbers reinforce the notion that the economy is still powering ahead despite expectations among forecasters for an eventual slowdown. With regards to Unemployment Claims, in the week ending December 14, the advance figure for seasonally adjusted initial claims was 220k, a decrease of 22k from the previous week's unrevised level of 242k. Wall St. rebounded overnight with all three major equity indices trading .3% higher late in the North American session. Out tonight will be their last main peace of data for the week with their Core PCE Price Index m/m. The Fed's preferred inflation gauge is expected to increase by 0.2% m/m, a slightly slower pace than last month's 0.3%.
EUR
AUDEUR regains the 60 handle at 0.6019, hitting highs of 0.6035 overnight with improved risk sentiment and a slight correction following the market's reaction to yesterday's Federal Reserve 2025 projections. The Eurozone’s Current Account and German GfK Consumer Climate came out last night. Consumer sentiment recovered slightly towards the end of the year. Eurozone’s Current Account was at 25.8B weaker than expected at 33.5B. European equities sold off on the open with DAX and CAC both -1.3%. It is a bit quiet to end of the week in terms of data, the only thing out tonight is German PPI m/m forecasted to coming at 0.3%.
GBP
AUDGBP opens stronger at 0.4990, attempting to regain the 0.50 handle, having hit 0.4997 highs overnight. Overnight, the Bank of England held rates at 4.75%, as expected, although a dovish front is building with three Members calling for a 25bp cut and 6 for a hold. Governor Ueda signaled at the press conference that he was looking for ‘a bit more certainty’ before hiking rates again. FTSE closed in the red at -1.1%. It is a quite finish for the week with Retail Sales m/m out at 6pm, forecast for 0.5% growth heading into the end of year.
NZD
AUDNZD opens stronger this morning at 1.1077. It is a quiet finish to the week for our Kiwi neighbours. Their Tade Balance came out this morning at -437M from forecast -1951M. Credit Card Spending y/y is out at 1pm today.