AUD Weakens on Continued Chinese Deflation
AUD
The Aussie Dollar opens down against most majors this morning, Asian equities closed in the green with the ASX up 0.3%, Shanghai Comp up 1.3% and Nikkei up 2.1%. We had Chinese inflation data released yesterday, being the CPI y/y which printed at -0.8% (exp. -0.5%) and their PPI y/y which printed at -2.5% (exp. -2.6%). The CPI print represents the lowest figure since 2009, with economists cautioning that while the January numbers were weak, particularly for food, they were likely made worse by the timing of the lunar new year, which is a major celebration in China. Today we’re having RBA Gov Bullock speak before the House of Representatives Standing Committee on Economics.
USD
The AUDUSD opens in the red at 0.6492, falling further in the late-night session by 0.6% but testing a small bounce back in the morning session today. Wall Street closed in the green with the Dow Jones up by 0.1%, S&P 500 flat and NASDAQ up by 0.3%. In the early morning session, we had the US Unemployment Claims which printed at 218K (exp. 221k). Economists mentioned “Initial jobless claims continue to signal a relatively low rate of firing. Unadjusted data suggest claims have been following a similar pattern to last year, expect for some weather-related disruptions. Still, claims could climb in coming weeks amid a flurry of layoff news”. We also had FOMC Member Barkin speak in an interview conducted by Bloomberg, where he notably mentioned that “if the economy turns south, that's a case for rate cut”. Lastly, we had the US 30-y Bond Auction 4.36|2.4 better than the previous level at 4.23|2.4. No US data until Tuesday.
EUR
The AUDEUR opens in the red at 0.6024 after taking a fall in the late-night session. Equities closed in the green with the DAX up by 0.2% and CAC up by 0.7%. Yesterday, we only had one event for the Eurozone being the ECB Economic Bulletin at 8pm, showing little impact on the Euro. Today, we have the German Final CPI m/m expected at 0.2%, the Italian Industrial Production m/m expected to increase to 0.8% from -1.5% and lastly German Buba President Nagel will speak at an awards ceremony hosted by the German Embassy in Paris.
GBP
The AUDGBP opens in the red at 0.5142, falling off just over 0.5% in the late-night session, the FTSE also closed in the red down at -0.4%. Yesterday, we had the RICS House Price Balance print in at -18%, higher than expectations at -22% where speculators mentioned that “The housing market has seen a continued improvement in buyer activity through the early part of the year”. Today we had MPC Member Mann speak at the Official Monetary and Financial Institution, in London, where she mentioned “I see risks of continued inflation momentum and embedded persistence” and that the UK financial conditions have eased too much. All eyes are on next week’s CPI y/y print on Wednesday.
NZD
The AUDNZD opens at 1.0648, after taking a steady decline in the late-night session. A quiet end to the week for the Kiwis with no data releases yesterday or today, but all eyes are on next Tuesday’s Inflation Expectations q/q with no forecasts but a previous level of 2.76%.