RBA Expected to Standpat Today
AUD
The Aussie Dollar opens flat against most majors after a quiet night of trading. The ASX closed down -0.3%, dragged by IT and energy. Asian equities traded lower on Monday led by the Nikkei, down -1.8%, with the Kospi, -0.5%, and Shenzhen, -0.2%, in tow. Gold fell -0.6% and Silver -0.4%. Yesterday's important Chinese data showed Retail Sales exceeding expectations, although Industrial Production and Fixed Asset Investment fell short. All eyes are on the RBA Cash Rate decision and Press Conference this afternoon. Australia's central bank is expected to hold the key interest rate at 4.35%. In the last two meetings, the RBA has gone to great pains to warn that Australian interest rates could go either up or down at this juncture of the battle against inflation. While no change to the rate is expected today, the official statement (2:30pm) and Governor Bullock's commentary (3:30pm) have the potential to shift markets.
USD
AUDUSD opens flat this morning at 0.6615, having reached 0.6620 highs yesterday morning and 0.6592 lows in the afternoon. This comes after a relatively light data calendar overnight in which we had the Empire State Manufacturing Index come in lower than expected at -6.0 (forecasted at -12.5, previous 15.6). New York state factory activity received by producers fell to almost 1-year lows. A reding below 0 indicated contraction. A bumper start to the week saw U.S. equities move higher with the Nasdaq closing +1%, S&P 500 +0.8% and Dow Jones +0.5%. Tonight, we have Core Retail Sales and Retail Sales. Core Retail Sales are expected to stay the same at 0.2%, however, Retail Sales are forecasted to increase from 0.0% to 0.3%. These figures will be key after what was a confusing week for Fed watchers which brought softer us inflation and a hawkish Fed.
EUR
AUDEUR has opened flat this morning at 0.6180. The DAX gained +0.4% yesterday, while the CAC gained +0.9%. We had no data from the Eurozone yesterday. Only low-tier data today. This week’s main event will be on Friday with the Flash Manufacturing and Services PMIs.
GBP
AUDGBP opens a little lower this morning at 0.5202, having traded mostly sideways over the past 24h. We had Rightmove HPI come out flat from previous 0.8%. Asking prices for UK homes going on the market were flat this month, adding to signs of a cooling off in the housing marketing. No data today ahead of a big back end to the week, kicking off tomorrow with CPI y/y (forecasted at 2.0%, prev. 2.3%).
NZD
AUDNZD opens flat at 1.078. Yesterday. the Business NZ Service Index came out lower at 43.0, previous 46.6, being the weakest level of activity in almost three years. This shows that consumers are reining in their spending. This morning, we had Westpac Consumer Sentiment which came in lower at 82.2 from 93.2. This week’s main event is on Thursday. GDP is forecasted 0.1%, previous -0.1%.