Broad-Based US Inflation Relief
AUD
The AUD opens mixed against the majors this morning after what was a relatively quiet day yesterday for local data with only MI Inflation Expectations coming through slightly lower than previous at 4.3%. Commodities also saw a mixed performance with Gold and Silver shooting up at 1.9% and 2.2% respectively, on the other hand Iron Ore, and Copper closed lower at -0.8% and 2.2% respectively. Asian equities closed notably higher across the board, the Nikkei +0.9%, Hang Seng +2.1%, and Shenzhen +1.1%. The ASX closed +0.9% higher, boosted by real estate and tech. No local news set for release today however we might see some Chinese data release with Trade Balance, and USD-Denominated Trade Balance set as tentative.
USD
AUDUSD extended its rally overnight appreciating towards 0.68, reaching its highest peak for the year to date, before retracing this morning opening at 0.6759. The divergence in monetary policy outlook between the RBA and the Fed is driving the shift higher. Softer than expected inflation in the US combined with recent evidence of a slowing labour market during June to further spur bets of rates cuts this year. Core CPI was soft at +0.06% MoM in June. The three-month trend has now moderated considerably since earlier in the year and rests at 2% annualized - the weakest pace since March 2021. Wall St. had a choppy session before closing mixed with the Dow Jones +0.1%, S&P 500 -0.8%, and the Nasdaq -1.9%. Another busy day ahead for US news President Biden kicking off the day with a news conference, however the main events of focus will be overnight with Core PPI m/m, PPI m/m, and Prelim UoM Consumer Sentiment.
EUR
The AUDEUR closes the week slightly lower opening this morning at 0.6221 after a relatively uneventful day with only German Final CPI m/m being released and coming through as forecast at 0.1%. Eurozone equities on the other hand closed higher with the DAX and CAC both up 0.7%. Another quiet day in the Eurozone with only German WPI m/m, and French Final CPI m/m set for release later this afternoon.
GBP
The AUDGBP coupling takes a slight dip opening lower this morning at 0.5235 after stronger than forecast GDP m/m data showed 0.4% growth in May 2024 after showing no growth in April 2024. The FTSE reacted accordingly closing in the green at 0.4%. No major data set for release today, after yesterday’s data dump with only the BOE Quarterly Bulletin set as tentative release.
NZD
AUDNZD has claimed the 1.11 handle, opening this morning at 1.1107 continuing its upward trend driven by a more dovish than expected steer from the Reserve Bank of New Zealand on Wednesday. The central bank held its key rate at 5.5% as expected but indicated that rate cuts might come earlier than previously thought. Looking at news today and we had the BusinessNZ Manufacturing Index this morning which came through lower than previous at 41.1, no further the news for the day.