US Jobs Report Defies Cooling Narrative
AUD
The Aussie Dollar comes in mixed against the majors to start the week, with commodities sharing a similar fate, with Gold down 0.7%, Silver down 1.9%, Copper down 0.9% but Iron Ore up 0.5%. Asian equities were mixed into the close, with the ASX up 1.5% but the Shanghai Comp down 1.5%. On Friday we had the PPI q/q released at 11:30am, coming in lower than expected at 0.9%, with expectations at 1.9% from a previous 1.8%. Today we have the MI Inflation Gauge m/m being released at 11am, no forecasts but was previously at 1%. We'll also see ANZ Job Advertisements and the domestic Goods Trade Balance at 11:30am. Tomorrow, we have out most crucial piece of data being released, the Cash Rate, expected to remain at 4.35%.
USD
The AUDUSD drifted higher on Friday, with the pair breaking the 0.66 barrier, before a midnight drop of over 1.5% from top to bottom, opening lower this morning at 0.6511. Wall Street closed up strong on Friday, with the Dow up 0.3%, S&P 500 up 1.1% and the Nasdaq up 1.7%. Friday night we had Average Hourly Earnings m/m came in higher at 0.6%, expected at 0.3% from a previous 0,4%; as well as Non-Farm Employment Change coming in higher at 353k, with expectations at 187k from a previous 333k. The Unemployment Rate remained unchanged at 3.7%, defying expectations of an increase to 3.8%. The surprise jobs release blew away market expectations, bolstering the greenback and helping drive home the Federal Reserve’s reluctance to endorse what had been market speculation of a March interest rate cut and aggressive cutting sequence. Today, we have Fed Chair Powell Speaking at 11am in a 60 Minutes interview around inflation risks, which may allow markets greater insight into his monetary policy ideas for the future. Later this evening, we’ll see the ISM Services PMI (exp. 52.0, prev. 50.6).
EUR
AUDEUR opens flat this morning, with the pair rallying over 0.5% before a harsh drop was seen at midnight, to see the pair open at 0.6037. European equities saw mixed results with the CAC flat and the DAX up 0.4%. To the news, on Friday there was French Industrial Production m/m released, coming in higher at 1.1%, expected at 0.2% from a previous 0.5%. Today, we have the European services PMI data dump being released, with 3 looking to remain unchanged, and 2 expected to have a light increase. PMI m/m will also be released, with a forecasted -0.8% from a previous -0.3%.
GBP
The AUDGBP comes in flat to start the week, with the pair rallying over Friday morning with a harsh drop starting at midnight, opening this morning at 0.5151. UK equities were soft into the close, with the FTSE closing down -0.1%. The Bank of England’s Pill spoke on Friday, mentioning that he believes that interest rate cuts are still some time away, worrying about the persistence of longer-term inflation. Tonight, we have the Final Services PMI to be released, expected to remain unchanged at 53.8, with the most important piece coming out on Wednesday being the Construction PMI, expected to increase from 46.8 to 47.2.
NZD
The AUDNZD finds mild gains, with the pair seeing most of the rise during Friday’s trading hours before going mostly sideways till this morning’s open of 1.0734. Today, we have ANZ Commodity Prices m/m being released at 11am, no forecasts but previously at 2.4%. The crucial data piece will be this Wednesday when the Unemployment Rate will be released, expected to increase from 3.9% to 4.3%.