RBA Minutes Set for Release This Morning
AUD
The Aussie Dollar opens the week mixed with strong Chinese PMI data contrasted with slightly hawkish US Fed commentary over the weekend. Chinese Manufacturing and Non-Manufacturing PMI’s both beat expectations in March, boosting confidence in China’s ability to achieve the ambitious 5% GDP growth for 2024. This was reflected in Manufacturing PMI printing at 50.8 against the expected 50.1 and the Non-Manufacturing PMI expanding at a strong 53.0 against expected 51.3. Off the back of this, Chinese equities rallied to start the week, with Shenzhen +1.6% and Shanghai Comp +1.2%, whilst the Japanese Nikkei fell 1.4% and ASX and Hang Seng were closed for the day. Commodities saw a mixed session, with Crude Oil +0.9%, Natural Gas -2.2%, Gold +0.1%, Silver flat +0.0% and Iron Ore +1.3%. Today at 11:30am we have the RBA’s Monetary Policy Meeting Minutes for March, where we'll get clarification surrounding Governor Bullock’s post-meeting commentary, where she was reluctant to discuss what options were considered regarding Australia's Cash Rate decision. She remained neutral and emphasized the board felt the current rate of 4.35% was appropriate given there were risks on both sides to growth and inflation.
USD
AUDUSD opens in the red at 0.6487 following Fed Chair Powell’s statement that the central bank was taking a patient approach to cut interest rates, as they await more evidence that inflation is contained. Most notably, he said “The fact that the US economy is growing at such a solid pace, the fact that the labor market is still very, very strong, gives us the chance to be a little more confident about inflation coming down before we take the important step of cutting rates”. Markets are now expecting the US central bank to make the first cut in June 2024. Adding to USD strength were strong figures in economic health and manufacturing, with Final GDP beating expectations of +3.2% to print at +3.4%, and the ISM Manufacturing PMI showing slight expansion at 50.3 against expected 48.5. Equities reacted meekly with Dow Jones -0.7%, S&P 500 -0.3% and NASDAQ flat. Tonight, we'll see JOLTS Job Openings data ahead of tomorrow evening's ADP Non-Farm Employment Change.
EUR
AUDEUR opens in the green at 0.6041, reacting off the strong Chinese PMI data along with some slightly weaker figures out of Germany and France over the Easter weekend. Germany’s retail spending slowed dramatically to -1.9% against expectations of +0.4%, while France followed suit with overall French Consumer Spending m/m printing flat against expectations of +0.3%. Equities had a minimal reaction with the DAX +0.1% and CAC closing flat. Moving forward, today we have German Preliminary CPI m/m expected to show growth at +0.5% against expected +0.4%. Another quiet week ahead, more notably we have Flash Estimates y/y on Core CPI and CPI on Wednesday, both are expected to show a slight slowing of inflation within Europe.
GBP
AUDGBP opens flat at 0.5160 with little data out of the UK over the weekend. UK Final GDP q/q printed with little surprise right on expectations of no monthly change at -0.3%, as did Current Account at -21.2B against expected -21.3B. UK equities had some slight upward movement, with FTSE +0.3%. Looking forward it will be a quiet week for the UK, more notably Final Manufacturing PMI released tonight, expected to remain flat from previous. The UK Construction PMI is set for release on Friday.
NZD
AUDNZD opens higher at 1.0898 with very minimal figures from NZ over Easter. ANZ Business Confidence showed a reduction of optimism across New Zealand businesses, coming in at 22.9 against a previous 34.7. Without much else, looking forward we have the GDT Price Index with a tentative release on Wednesday, as well as ANZ Commodity Prices m/m on Thursday.