Improving Risk Sentiment Buoys AUD
AUD
The Aussie dollar rose against the majors overnight, steady against the New Zealand dollar, as rebounding stock markets and a widespread uplift in government bond yields suggested recovering risk appetite among investors. Yesterday’s 1-y and 5-y Loan Prime Rate out of China came through as expected at 3.45%, and 3.95% respectively, which didn't undermine the AUD recovery. Commodities on the other hand came through mixed with Gold flat, Silver +0.2%, Iron Ore -0.5%, and Copper -0.3%, while Asian equities rebounded following a weak performance with the ASX 200 up 1.1%, Nikkei up 1% and the Hang Seng up 1.8%. Looking at the news, this morning we had our Flash Manufacturing PMI, Flash Services PMI release with manufacturing at 49.9 higher from the previous 47.3, while services came through 54.2 lower than the previous of 54.4. Last month's readings were also revised higher so AUD looking buoyant this morning so far. No further local news for today, however tomorrow we have the release of our CPI q/q and CPI y/y with expectations of an 0.8% increase in the opening quarter and by 0.9% on a trimmed mean basis while the annual inflation rate is expected to stay at 3.4%.
USD
The AUDUSD opens up slightly higher this morning at 0.6448, after rallying late last night. A positive night for Wall Street closing in the green with the Dow Jones +0.7%, S&P 500 +0.9%, and the Nasdaq +1.1%. Looking ahead at US new releases, US S&P preliminary PMIs for April are due later this evening. These will provide early insight into manufacturing and services sector momentum during the month. Recent indicators for both suggest a modest expansion set at 52.0. We will also get the release of New Home Sales which is set for an increase from 662K to 668K, and Richmond Manufacturing Index which is forecasted to increase from -11 to -7.
EUR
The AUDEUR opens up higher this morning at 0.6052, after last night's Eurozone Consumer Confidence came through slightly worse than expected at -15. ECB President Lagarde also spoke at the Yale Jackson School of Global Affairs however monetary policy was not mentioned. Eurozone equities closed in the green with the DAX +0.7%, and the CAC +0.2%. We have a myriad of releases later this evening out of the Eurozone with French, German Flash Manufacturing and Services PMI’s all forecasted to improve.
GBP
The AUDGBP coupling regains its 0.52 handle, opening higher this morning at 0.5220. No news released yesterday however UK equities performed very well with the FTSE closing in the green +1.6%. Few bits of data set for release today with Public Sector Net Borrowing set for release in the afternoon, while later this evening we will see the release of the UK Flash Manufacturing PMI, and Flash Services PMI which is forecast for 50.3, and 53.0 respectively. MPC Member Pill Speaks will also be speaking tonight at 9:15pm.
NZD
The AUDNZD opens up this morning largely flat at 1.0894, after what was a quiet day with only Credit Card Spending y/y being released, coming through lower than previous at 1.4%. Another quiet day for our Kiwi neighbors with nothing set for release, however tomorrow we have the release of their Trade Balance which is forecast at -505M from the previous -218M.