AUS Federal Budget Tonight
AUD
The Aussie Dollar moved sideways / a little lower at the front end of the week, with Gold flat, Silver down -0.1%, Iron Ore down -0.3% and Copper up +2.4%. It is a similar story with the Asian equites, with the ASX closing flat and the Shanghai Comp closing down -0.2%. Yesterday we had the NAB Business Confidence come out unchanged at 1, with today being similarly quiet, with Foreign Direct Investment ytd/y set to be released from China, with no expectations, previously at -26.1%. Australia’s Federal Budget will be handed down this evening, with no expectations that it will create an immediate effect on the market. Treasurer Jim Chalmers has repeatedly said he's kept inflation in mind when crafting this year's budget and is confident that the measures won't contribute to it. Tomorrow will bring the AUD's main event for the week, being the Wage Price Index q/q. The RBA will be watching closely as real wage growth and higher disposable incomes may contribute further to Australia's upside price pressures.
USD
The AUDUSD opens relatively flat with the pair ducking below the 0.66 barrier for most of the trading day, to finish overnight with a small rally to open this morning at 0.6609. Wall Street was soft into the close, with the Dow closing down -0.2%, the S&P 500 closing flat and the Nasdaq up +0.3%. Last night we had both FOMC members Jefferson and Mester speak at events, however they did not have any effect on the markets. Looking forward, tonight the PPI m/m and Core PPI m/m is set to be released, with the Core figure set to remain unchanged at 0.2% while the former is expected to rise from 0.2% to 0.3%. Following this, Fed Chair Powell will be speaking at the Foreign Bankers Association in Amsterdam.
EUR
The AUDEUR sees a light decline over the past 24 hours, seeing the pair open this morning at a rate of 0.6124. European equities similarly saw a light decline, with the DAX closing down -0.2% and the CAC down -0.1%. To the news, it was a quiet start to the week, with just the Eurogroup Meetings released, not impacting markets. Tonight, we have the German Final CPI m/m to be released, expected to remain at 0.5%, followed by the ZEW Economic Sentiment, expected to rise from 43.9 to 46.1.
GBP
The AUDGBP sees a slight drop since yesterday, with the pair pushing to flirt with the 0.5280 barrier midday, followed by a decline to this morning’s open at 0.5262. The UK’s equities closed into the red to start the week, with the FTSE down -0.2%. Yesterday there was no news released out of the UK, however, today’s releases are the biggest of the week, their employment data. Starting at 4pm this afternoon we have the Claimant Count Change set to be released, expected to increase from 10.9k to 13.9K, and the Average Earnings Index 3m/y, expected to cool from 5.6% to 5.3%. These expectations are that the British labour market is easing, thereby reducing inflation fears and furthering the case for interest rate cuts later this year.
NZD
The AUDNZD sees a small push higher, with the pair rallying to trifle with the 1.10 barrier, before falling off overnight to this morning’s open 1.0975. At 1pm yesterday we had the Inflation Expectations q/q release lower at 2.33%, previously at 2.50%. The RBNZ has been sitting on the dovish side for most of this year, with many market speculators anticipating the Kiwis to be the first major central bank to cut rates this year (the RBNZ was the first to cut in Covid, first to hike post-Covid and first to announce a subsequent hold following the hiking campaign). This morning, we had visitor Arrivals m/m released, coming in higher at 9.1% from a 1.6%, with nothing further to be released today.