US Job Openings at 3-Year Low
AUD
Shifts in global risk sentiment saw markets sell of the Aussie Dollar throughout the course of yesterday. The ASX finished -0.3% lower with energy and materials underperforming. Asian equities were mixed as the Shenzhen and Hang Seng managed +0.8% and +0.2% gains while the Nikkei slid -0.2%. Yesterday’s Australian Company Operating Profits q/q slid -2.5%, being far worse than expectations and reflecting the higher interest rate environment. Later this morning will bring Australia’s GDP q/q with markets expecting ongoing weak growth of 0.3%, a similar pace to the second half of 2023. The weakness in the economy in Q1 is expected to have been broad-based, with little growth in both private final domestic demand and public demand. We’ll also see China’s Caixin Services PMI, providing insight into their services sector.
USD
AUDUSD touched 2-wek highs of 0.6698 yesterday morning before retracing throughout the remainder of the session. The pair bottomed-out at 0.6631 in the evening ahead of this morning’s open at 0.6645. Wall Street enjoyed the softer JOLTS Job Openings report, with the Dow Jones leading the way up +0.4%, while the Nasdaq and S&P 500 both closed +0.2% higher. The number of job openings in the US shrank for the second month in a row, setting a new 3-year low amid further signals of cooling in the US labour market, supporting the case for a Fed interest rate cut by year-end. Tonight’s ADP Non-Farm Employment Change will feed into the labour market narrative, with any surprise result potentially bringing movement for the AUDUSD pair. We’ll also see the ISM Services PMI, being a leading indicator of economic health and shedding light on the state of the services sector in the US.
EUR
AUDEUR opens a little lower at 0.6107, having touched 0.6139 highs in the late morning yesterday before falling off to 0.6102 lows. The DAX and CAC gave up -1.1% and -0.8% respectively. We saw a bunch of low-tier Eurozone Final Manufacturing PMIs land near-expectations yesterday, remaining in contractionary territory. Tonight will bring low-tier Final Services PMIs as well as Producer Price Inflation (PPI m/m) for the Eurozone. All eyes are on tomorrow evening’s European Central Bank interest rate decision. Overall, Eurozone inflation has been falling for some time, with easing US inflation and sliding oil prices also lending a helping hand. In rates markets, a cut by the ECB is almost fully baked in, with markets pricing in nearly 25bps-worth of easing which would take the Main Refinancing Rate to 4.25%. The accompanying commentary is expected to bring volatility to FX markets, particularly given the ECB outlook beyond June is still open.
GBP
AUDGBP opens lower at 0.5202, having fallen throughout the course of yesterday, reaching 0.5189 lows before finding comfort again above the 0.52 handle. We’ve got another quiet week for the Pound. This evening will bring the UK Final Services PMI. The main event for the week will be tomorrow’s Construction PMI.
NZD
AUDNZD peaked at 1.0812 yesterday morning before gradually falling throughout the course of the day. The pair reached 10-week lows of 1.0751 in the early hours ahead of this morning’s open at 1.0763. No data from the Kiwis yesterday. This morning’s Global Dairy Trade (GT) Price Index showed a +1.7% gain over the past 2 weeks. Later in the week we’ll see ANZ Commodity Prices and Manufacturing Sales data.