Chinese CPI Supports AUD
AUD
The Aussie Dollar opens the week a tad higher against most major currencies, having benefited from stronger-than-expected Consumer Price Inflation (CPI) data from China over the weekend. On Saturday we had Chinese CPI y/y print at +0.7% (exp. +0.3%), reflecting the first increase in Chinese consumer prices since August 2023, thereby breaking the contraction streak which threatened growth potential in the world's second-largest economy. Producer Price Inflation (PPI) fell -2.7%, continuing the longest string of declines since 2016 and reminding markets it is still too soon to conclude that inflation in China is over. Regardless, the Aussie Dollar reacted positively to the stronger consumer prices. Commodities ended Friday mostly in the red, with only Gold up 0.8%, Silver down -0.1%, Iron Ore down -0.8% and Copper down -0.9%. Asian equities closed in the green, with the ASX up 1.1% and the Shanghai Comp up 0.6%. Today, there is no local news to be released, but there are tentative Chinese New loans data to be released this week, expected to decrease from 4920B to 1510B. All in all, we are set for a quiet week ahead for the Aussie dollar, with the only data print being tomorrow's low tier NAB Business Confidence print.
USD
The AUDUSD sees some volatility over the weekend, with the pair climbing on Friday to just over 0.6670 before retracing to open this morning at 0.6623, being higher than Friday's open. Wall Street took a tumble on Friday, with the Dow Jones down -0.2%, S&P 500 down -0.7% and the NASDAQ down -1.2%. Friday night brought mixed results for US labour data. Average Hourly Earnings m/m came out at 0.1%, lower than the expected 0.2% and down from a previous 0.5%, Non-Farm Employment Change came in higher at 275k, previously at 198k from a previous 229K and the Unemployment Rate increased to 3.9%, exceeding expectations that it would remain unchanged at 3.7%. The rise in unemployment is showing the results of the high interest rate environment on the US Economy, which may further push concerns to bring forward rate cuts this year. Today there is no news to be released. All eyes are on their CPI figure set for release late tomorrow evening.
EUR
The AUDEUR had some large movements since Friday, with the pair rallying till it flirted with the 0.6080 barrier before nearly doing a full retracement to this morning’s open of 0.6054, being higher than Friday's open. European equities were soft into the close, with the DAX down -0.2% and the CAC up +0.1%. To the news, Revised GDP q/q was released, coming in unchanged at 0.0%. German Industrial Production m/m came out higher at 1%, expected at 0.50% from a previous -2.0%. Today we have Eurogroup Meetings occurring, which is not expected to impact markets currently.
GBP
The AUDGBP took a slide since Friday, with the pair gaining over the Friday trading session before falling 0.6% to this morning’s open of 0.5148. British equities closed in the red, with the FTSE down -0.4%. There were no data releases on Friday or over the weekend. MPC Member Mann is set to speak tonight, with the next piece of crucial data coming out tomorrow, being the Claimant Count Change, expected to increase from 14.1k to 20.3k.
NZD
The AUDNZD saw marginal gains since Friday’s open, with the pair gaining over 30 pips during the trading session, before dropping off to this morning’s open of 1.0728. No news out on Friday and the next piece of news is on Wednesday, being the Food Price Index m/m, previously at 0.9%.