China to Announce Key Lending Rates
AUD
The Aussie Dollar opens higher against most of the majors to start the week, fueled by strong commodity prices with Gold closing up 1.6%, Silver up 6.3%, Iron Ore up 0.1% and Copper up 3.9%. Asian Equities were mixed into the close, with the ASX down -0.8% and the Shanghai Comp up 1%. On Friday, we had Chinese Industrial Production y/y come in higher at 6.7%, expected at 5.5% from a 4.5%, and Chinese Retail Sales y/y come in lower at 2.3%, expectations at 3.7% from a previous 3.1%. These opposing results largely cancelled out their market influence. Later today we have the Chinese 1-y and 5-y Loan Prime Rates let to be released, with markets anticipating that they will remain unchanged at 3.45% and 3.95% respectively... Although expectations are slowly growing for a cut in the 5y mortgage reference rate as Chinese authorities scramble to boost housing.
USD
The AUDUSD finishes the week strong, with the pair falling off during Friday, while climbing overnight to open this morning at 0.6694. Wall Street was soft into the close of the week, with the Dow Jones closing up 0.3%, S$P 500 up 0.1% and NASDAQ down 0.1%. FOMC Member Waller spoke on Friday night, followed by Fed Chair Powell on Sunday night, with both speaking about payment innovation and at a law conference, not impacting FX markets. Looking forward, we have FOMC Member Waller speaking tonight, with all eyes on Wednesday night's FOMC Meeting Minutes, which will give crucial insight into the thoughts of when the US central bank wants to being the cutting cycle (potentially this year).
EUR
The AUDEUR sees a strong close to the week, with the pair keeping mostly flat until the night session where a small rally occurred, opening his morning at 0.6157. European equities closed in the red, with the DAX down 0.2% and the CAC down 0.3%. On Friday, we had Final CPI y/y and Final Core CPI y/y come in unchanged at 2.4% and 2.7% respectively, as forecasted. Today there is no news to be released, but Thursday there is French, German and Flash PMI’s set to be released, all expected to slightly uptick from their previous measure.
GBP
The AUDGBP opens the week flat, with the pair keeping relatively flat over Friday and the weekend, opening this morning at 0.5266. On Friday MPC Member Mann Speaking at a conference around business investments, this did not have an impact on the market. This morning, we had the Rightmove HPI m/m released lower at 0.8% from a previous 1.1%. Tonight, MPC Member Broadbent will be speaking, also, not expected to shift markets, with BOE Governor Bailey speaking on Wednesday with a change of influencing markets with his commentary.
NZD
The AUDNZD sees a marginal gain, with the pair dropping over Friday, and during the night session there was a full retrace and some, to this morning’s open of 1.0917. There was no data out on Friday or today, with anticipation for this Wednesday’s Official Cash Rate announcement, with expectations that there will be a hold at 5.5%, but any dovish commentary may facilitate further AUDNZD gains.