AUD Strengthens Ahead of Today's Labour Data
AUD
The Aussie opens higher across the board as markets stabilize from yesterday’s strong US inflation data. Yesterday’s intra-day and overnight session saw the Aussie slowly inching upwards despite no local or Chinese data out during this time. Equities had a mixed day with ASX and Nikkei closing -0.7% and Shanghai Comp +1.3%. Commodities had a red day with Crude Oil and Natural Gas both -1.8%, Gold -0.2%, Silver -0.3% and Copper flat. This morning at 9:00am we’ll hear Governor Bullock speaking in Canberra, where the House Economics Committee will scrutinize the RBA’s approach to tackling high inflation and discuss how future data and evolving risks will be factored into their strategy. At 11:30am we'll see the AUD's big event for the week... Being our Employment Change and Unemployment Rate. 26.4K jobs are expected to have been added, up 90K from the previous month. Our Unemployment Rate is expected to land at 4.0%, up +0.1% from previous. No more significant data out until next Tuesday, where the RBA’s Monetary Policy Meeting Minutes will be released, giving insight to their decision in holding at 4.35%.
USD
AUDUSD opens higher at 0.6491, recovering halfway from Wednesday’s lows to where it was before the strong US CPI data print, despite no further data coming out from the US during this session. This morning, we had FOMC Member Barr comment on January’s data results, stating the FOMC needs to see continued good data before beginning the process of cutting rates. Wall Street saw a green day with Dow Jones closing +0.2%, S&P 500 +0.6% and NASDAQ +1.0%. Late this evening, we’ll have insight into their manufacturing, employment and retail sales. Core Retail Sales m/m and Retail Sales m/m both expected to decrease from previous, to land at 0.2% and -0.2% respectively. Unemployment Claims are expected to remain flat at 219K, and the Empire State Manufacturing Index is expected to add a strong 30 points to -13.7, from previous -43.7.
EUR
AUDEUR opens in the green at 0.6051, making a full recovery from the AUD’s steep decline from the US CPI print on Wednesday, despite no significant data coming out from the Eurozone. Last night, Eurozone’s Flash Unemployment Change q/q came out right on expectations at 0.3%, as did the Flash GDP q/q remaining flat at 0.0%. At the same time, Industrial Production m/m printed much stronger than expected at +2.6% to expectations of -0.2%, however with little market reaction. Tonight at 7:00pm we have ECB President Lagarde delivering a speech before the Committee on Economic and Monetary Affairs of the European Parliament, and Eurozone Trade Balance released at 9:00pm.
GBP
AUDGBP opens up this morning at 0.5164, off the back of UK’s weak inflation data, missing expectations on all measures. UK’s CPI y/y was expected at 4.1%, but missed at 4.0%, whilst Core CPI y/y was expected at 0.1%, but also missed at -0.8%. PPI Input m/m missed at -0.8% to its expected 0.1%, whilst PPI Output m/m was the only one on expectations at -0.2%. Governor Bailey spoke shortly after, testifying before the House of Lords Economic Affairs Committee, stating the inflation data was “welcome”, and interest rates would remain at current levels for some time due to stickier services inflation, which they saw as misaligned with their 2.0% inflation target. On the equities side, we saw the FTSE running up +0.7%. Today, we have eyes on the GDP m/m out at 6:00pm, expected to land at -0.2% (prev. +0.3%). Preliminary GDP q/q is also set to release at the same time, expected at -0.1% (prev. -0.1%).
NZD
AUDNZD opens higher at 1.0665, off the back of weaker NZ tourism data printing this morning. Visitor Arrivals m/m came in at -2.2%, losing 0.6% from previous month’s -1.6%. Not much more is coming out today, until tomorrow morning at 5:40am where RBNZ’s Governor Orr will be speaking, and at 8:30am where the Business NZ Manufacturing Index will also be released.