Fed's Preferred Inflation Gauge Tonight
AUD
The Aussie Dollar sees marginal gains in the past 24 hours, pushing higher against some majors, opening flat against others, despite commodities taking a hit. Gold was down 0.2%, Silver down 0.7%, Iron Ore down 0.2% and Copper leading the charge, down 2.8%. Asian equities were in a similar state, with the ASX down 0.5% and the Shanghai Comp down 0.6%. It was a quiet day for news locally yesterday, with Building Approvals m/m coming in much lower at -0.3%, expected to soften from 2.7% to 0.6%. At 11:30am today, we have Chinese Manufacturing and Non-Manufacturing PMIs being released, with both expected to slightly rise, from 50.4 to 50.5 and 51.2 to 51.5 respectively. This data is key factor in understanding how the Chinese Economy is recovering, with the Manufacturing PMI figure not being expansionary for 2 months in a row since March 2023, showing the struggles they are facing.
USD
The AUDUSD sees a retrace from yesterday’s drop, with the pair briefly dropping below the 0.66 barrier in the afternoon before running up overnight to this morning’s open of 0.6629. Wall Street took a hit, with the DOW JONES down 0.9%, S&P 500 down 0.6% and the NASDAQ down 1.1%. To the news, Prelim GDP q/q came out higher than expected at 1.3%, forecasted at 1.2%, softening from last reading of 1.6%. The figure reflects weaker consumer spending on goods. US Unemployment Claims printed near expectations at 219k for the week, being in line with previous readings. Pending Home Sales took a hit, falling -7.7% from a previous +3.6% increase. Tonight's Core PCE Price Index m/m may bring currency volatility, being the Fed's preferred inflation gauge as it accounts for shifts in consumer behavior, such as when shoppers opt for cheaper substitute items. US inflation has been taking baby steps towards where policymakers want it, with tonight's report expected to show further creeping progress. The Core figure (this excludes volatile food and energy prices) is expected to cool to +0.2% m/m.
EUR
The AUDEUR opens this morning flat, with the pair falling during yesterday’s trading day, and it gained it back overnight to open this morning at 0.6120. European equities saw a light gain, with the DAX up 0.1%, and the CAC up 0.5%. Spanish Flash CPI y/y was released, coming in lower at 3.6%, expected at 3.7% but still higher than the previous 3.3%. Tonight, we have Core CPI Flash Estimate y/y, expected to remain unchanged at 2.7% and CPI Flash Estimate y/y, expected to increase from 2.4% to 2.5%. These results will give a strong indication to the ECB on how the Union is handling their inflation, and if their no more hikes approach has been the right one.
GBP
The AUDGBP sees some movement in the past 24 hours, briefly dipping below the 0.52 barrier, then pushing higher, managing to finish flat, opening this morning at 0.5206. British equities took home some gains, with the FTSE lifting 0.6%. It was a quiet day for the brits with no news released yesterday. Today having Nationwide HPI m/m, expected to increase from -0.4% to 0.1%, and mortgage Approvals lifting from 61k to 62k.
NZD
The AUDNZD pair climbed slowly since yesterday morning, hitting an 8-day high earlier today, with the pair opening this morning at 1.0841. The NZ Annual Budget Release was released, not giving an immediate effect to the markets, but gradual fiscal policy amendments may shift the trends in the NZD strength.