4 in 5 Expect RBA to Hold Today
AUD
The Aussie Dollar sees a stagnant start to the week across the board, opening relatively flat against all majors despite yesterday's largely positive Chinese economic data. Their Industrial Production y/y printed higher at 7.0% (exp. 5.3%, prev. 6.8%), a level of growth unseen since March 2022, suggesting the sluggish Chinese economy could be starting to gain some traction. Chinese Retail Sales y/y was also released, coming slightly lower at 5.5%, expected at 5.6% from a 7.4%. Commodities were mixed in the close, with Gold flat, Silver down -0.1%, Iron Ore down -0.7% and Copper up 0.2%. Asian equities saw gains with the ASX up 0.1% and the Shanghai Comp up 1%. Today at 2:30pm we have our local RBA Cash Rate decision and RBA Rate Statement. We'll also see the Press Conference at 3:30pm. Markets are currently pricing a 20% chance of an interest rate cut, while major banks and most economists expect at hold at 4.35%. For the entire year, markets have one cut fully priced in and around an 85% chance of a second cut. Easing inflation and slowing economic growth give our central bank no reason to hike at this point in time. Depending on the commentary in the Rate Statement and Press Conference, the Aussie Dollar may see some volatility.
USD
Minimal economic data saw the AUDUSD pair trade sideways over the past 24h, opening this morning at 0.6559. Wall Street closed the day up across the board, with the Dow Jones up 0.1%, with both the S&P 500 and NSADAQ closing up 0.8%. Yesterday there was NAHB Housing Market Index released at 51, higher than the expected 48, previously at 48. Tonight, we have Building Permits to be released, expected to increase to from 1.47m to 1.50m and Housing Starts expected to increase from 1.33m to 1.43m.
EUR
An unremarkable trading day yesterday brought little movement to the AUDEUR, opening flat this morning at 0.6030. European equities also had an unremarkable day, with the DAX closing at 0.0% and CAC closing down 0.2%. To the news, Final Core CPI y/y and Final CPI y/y were both released, landing on-expectations at 3.1% and 2.6% respectively, being in line with the previous releases. The Trade Balance was also released, coming in higher at 28.1B, expected at 14.2B from a 14.3B previously. Tonight, we have the ZEW Economic Sentiment being released, expected to increase from 19.9 to 20.6.
GBP
The AUDGBP held a tight range over the past 24h, opening this morning flat at 0.5149. UK equities were soft into the close with the FTSE down -0.1%. Looking to the news, yesterday we had the Rightmove HPI m/m, coming in higher at 1.5%, previously at 0.9%. Today there is no data set to be released, with Wednesday’s CPI y/y being the next piece, expected at 3.5% (prev. 4.0%).
NZD
The AUDNZD opens flat this morning, with the pair trading in a very tight range so far this week, opening this morning at 1.0776. There was no news out yesterday and today will be the same, with Thursday being the release of the GDP q/q, their most important data point for the week. Expected to increase by +0.1% after the previous -0.3% slide.