Greenback Hopes for Retail Sales Recovery
AUD
The Aussie Dollar opens higher against almost all of the majors this morning (flat against the Euro) after a modest improvement in risk sentiment yesterday despite no local or Chinese data. Asian equities were mostly lower with the Shenzhen down -0.7%, Nikkei -0.3% and Hang Seng -0.1%. The ASX rose 0.2% with consumer discretionary and real estate outperforming. Today, we may see the tentative release of New Loans from China, expected to print at 1540B from its previous level of 4920B, with forecasts down, it gives an indication of China’s borrowing and spending confidence somewhat decreasing from the start of the year. We also have their M2 Money supply y/y, expected to print at 8.8% from 8.7%. Tomorrow, we have the Chinese New Home Prices m/m with no expectations, but its previous level was -0.37%. The next major piece Chinese data piece will be Industrial Production, on Monday.
USD
The AUDUSD reached 0.6635 highs in the early hours before opening this morning at 0.6622, being higher than yesterday's open after a quiet session for the US. Wall Street closed the session mixed with the Nasdaq -0.6%, the S&P 500 at -0.3% and the Dow Jones up 0.1%. Tonight, we'll see a flurry of US data including Core PPI m/m (exp. 0.2%, prev. 0.5%), Core Retail Sales m/m (exp. 0.5%, pre. -0.6%), PPI m/m (exp. 0.3%, prev. 0.3%), Retail Sales m/m (exp. 0.8%, prev. -0.8%) and Unemployment Claims expected to increase slightly to 218K from the previous 217K. The Core Retail Sales figures are likely to be watched more closely and provide some indication on whether the unwinding of strong gains in Q4 2023 that was apparent in January persisted in the month.
EUR
The AUDEUR opens flat this morning at 0.6046 with the Euro seemingly unphased by the flurry of data missing yesterday. German WPI m/m came in short at -0.1%, Italian quarterly Unemployment Rate short at 7.4% and the Industrial Production m/m short at -3.2%. The equities closed the session in the green with the Dax flat and the CAC Up 0.6%. No data from the Eurozone today but tomorrow we’ll see some lower tier data. The French Final CPI m/m expected to print at 0.8%, the Italian Retail Sales m/m expected to print at 0.2% and the Italian Trade Balance expected to print at 6.22B.
GBP
The AUDGBP opens in the green at 0.5168 with the FTSE also up 0.3%. Yesterday, we saw Bank of England's Governor Bailey speak in a panel discussion in Rome, where he mentioned “Monetary policy is doing its job", "Inflation expectations appear to be well anchored” and “We have seen limited evidence so far of rising unemployment as a condition to reduce inflation." We also saw the GDP m/m print on expectations at 0.2%, while the Purchasing Managers' Survey mentioned “New business intakes were a particularly bright spot as service providers reported the fastest order book growth since May 2023". Later this morning, we'll see the RICS House Price Balance.
NZD
The AUDNZD opens strong this morning at 1.0753 after a quiet start to the week for the NZ with no data releases until yesterday, being the FPI m/m which printed at -0.6% from the previous 1.2%. This morning, we saw the Visitors Arrivals m/m print at 8.2% with its previous at -2.3%. The NZD will close the week off quietly with no major data releases.