AUD Flat Ahead of Global Flash PMIs
AUD
The Aussie opens flat across the board with local wage data falling right on expectations yesterday. Our Wage Price Index q/q came in at the forecasted +0.9%, showing wage increases beating the +0.6% inflation in the December quarter. The annual wage price increase printed at 4.2%, slightly above last week's CPI print of 4.1% y/y, reflecting real wage growth & pushing back against any expectations of RBA interest rate cuts in the immediate term. Asian equities closed mixed with the Nikkei down -0.3%, Shanghai Comp climbing +1.0%, whilst the ASX opened -0.7% lower following a sharp sell-off in consumer staples. Commodities saw a mostly green day, with Crude Oil +1.2%, Natural Gas -0.3%, Gold +0.1%, Silver +0.4% and Iron Ore +0.3%. No data during our intra-day session, but overnight we have the Chinese CB Leading Index m/m.
USD
AUDUSD opens flat at 0.6551 with no data figures coming out overnight and multiple FOMC members speaking. Most notably, FOMC Member Barkin hawkishly said recent economic data showed price pressures in shelter and services being still too high, despite an overall improvement in inflation figures. No explicit comments from him on the rate path, whilst highlighting the Fed should still wait for more evidence that inflation is firmly on a path to their target 2% before cutting rates. FOMC Meeting Minutes were also released, supporting the sentiment shared by Barkin to watch for firm confirmations of inflation returning to target. Whilst it indicated a general sense of optimism in the Fed’s success in controlling inflation, most members also hawkishly noted the risks of moving too quickly in easing current policy. On the equities desk, Wall St. traded poorly overnight with the NASDAQ trading -1.0%, the S&P 500 -0.4%, and the Dow Jones -0.4%. Looking forward, overnight we have US Unemployment Claims expected to remain flat, Flash Manufacturing PMI expected to decrease slightly to 50.5 and Flash Services PMI expected to decrease to 52.4.
EUR
AUDEUR opens flat at 0.6057 with their only piece of data coming in right on expectations overnight. Euro Consumer Confidence was expected to remain flat at -16 from the previous month, and it came in right on expectations. Eurozone equities had a slightly green day, with CAC +0.3% and DAX +0.2%. Tonight between 7-8pm, we get insight into German, French and overall Eurozone manufacturing and services sector, with a flurry of Flash PMI’s. All expected to remain in contractionary territory, albeit drawing closer to the break-even 50.0 level. Final CPII y/y figures also to come out, expected in-line with the previous month, with EUR Final Core CPI y/y at 3.3% and Final CPI y/y at 2.8%.
GBP
AUDGBP opens flat at 0.5183 with no meaningful data numbers released in the past 24h. Notably, MPC Member Dhingra spoke and explained her decision in voting to lower interest rates at their most recent meeting, emphasizing she believes inflation is already on a “firm downward path”. UK equities had a red day, with the FTSE -0.7%. Looking forward, tonight at 8:30pm we have Flash Manufacturing PMI expected to increase by +0.5 points to 47.5, and Flash Services PMI expected to decrease slightly by -0.1 to 54.2.
NZD
AUDNZD opens lower at 1.0599 despite much worse than expected data from NZ this morning. The Trade Balance was expected at a deficit of -200M but came in at -976M, although with little market reaction. Today at 1pm we have Credit Card spending y/y released, but more importantly tomorrow morning at 8:45am we have Retail Sales q/q coming out, expected to decrease by-0.2%.