AUD Extends Recent Gains
AUD
The Aussie Dollar starts today higher against the majors, as risk sentiment continued gaining traction overnight. Asian Equites saw a mixed close with the ASX +0.2%, Shanghai Comp -0.3% and the Nikkei -0.1%. Commodities also saw a mixed finish to the session with Crude Oil remaining flat, Natural Gas +8.1%, Gold +0.2%, Silver +0.3%, Iron Ore -1.2% and Copper -1%. Yesterday, we saw some relatively low tier data releases out locally, with both Building Approvals m/m and the Goods Trade Balance missing the mark and reading under market expectations. No data out locally or out of China as their bank holiday continues today, business as usual from Monday onwards. Tuesday will be a big day for the Aussie Dollar, bringing the RBA interest rate decision in the early afternoon. Markets are largely expecting to see the RBA once again leave the Cash Rate on hold at 4.35%, with Governor Bullock potentially leaning towards hawkish commentary given last week's surprise uptick in Aussie consumer price data. Given this, the argument for another hike is growing as interest rate futures currently reflect a 40% chance of a 25bps increase by November.
USD
The AUDUSD pair further improves on yesterday’s gains, reclaiming the early week highs, opening this morning close to half a cent higher at 0.6573. Wall Street saw uniform gains into the close with the Dow Jones +0.9%, S&P 500 +0.8% and Nasdaq +1.5%. US weekly Unemployment Claims were a little better than expected with initial claims printing at 208K against expectations of 211k, while continuing claims were 1.774 m/m compared to expectations of 1.790 m/m. However, US Challenger job cuts for April read -3.3% down from 0.7% in April. The second round of US data saw March Factory orders match expectations at +1.6% though the Core measure was higher than expected. Little reaction to the data. A busy night tonight for the USD as we await important employment data in the form of Average Hourly Earnings m/m, Non-Farm Employment Change and the Unemployment Rate. After a solid jobs report in March, the April figures are again expected to point towards the labour market remaining tight, with a strong pace of job growth coupled with cooling earnings pressures. We'll also see the ISM Services PMI, being a leading indicator of economic health in the US services sector.
EUR
The AUDEUR once again reclaims the 0.61 handle, opening over half a percent higher this morning at 0.6126. Excluding earlier this week, the AUDEUR pair hasn't been in this territory since January. European equities didn’t fair too well at yesterday's close, with the DAX -0.2% and the CAC -0.9%. Yesterday saw some mixed results come in for the Spanish, Italian, French, German and Eurozone’s final manufacturing PMI’s, with the data having little effect. Tonight, we will see the Eurozone’s Unemployment Rate for March which is likely to see a small uptick to 6.6%, rising from the multi-decade low of 6.5%, reflecting ongoing stagnation in the economy that has seen indications of a loosening in labour market conditions.
GBP
A quiet couple of days on the data and improved risk sentiment has allowed the AUDGBP to tick higher, opening this morning at 0.5242. British equites closed higher yesterday with the FTSE gaining 0.6%. No data out yesterday and tonight we will only sell the release of their Final Services PMI which is expected to remain flat at 54.9.
NZD
The AUDNZD pair opens relatively a little higher this morning, getting comfortable in the 1.10 territory opening this morning at 1.1022. No new data out yesterday or today, with the next data release being Monday’s ANZ Commodity Prices m/m.