AUD Sideways on Mixed Chinese Data

AUD

AUD opens mixed against the majors, having moved relatively sideways throughout the course of yesterday after China posted mixed economic data. Figures from China yesterday showed their Retail Sales y/y have dropped to 2.0% (prev. 3.7%), while the Unemployment Rate remains unchanged at a 4-month low at 5.0%. The strong Industrial Production y/y figures (5.3%, exp. 4.9%) were countered by weaker than expected economic growth. China's GDP in the second quarter of 2024 printed at 4.7% (exp. 5.1%, prev. 5.3%), with the country's growth outlook remaining vulnerable and relying very much on policy support. Asian equities began the week mixed with the Nikkei -2.5%, Hang Seng 1.5% and Shenzhen +0.1% Locally, the ASX 200 set record highs above 8000 before closing +0.7%, driven by tech and consumer discretionary. Commodities finished up mixed with Crude Oil -0.4%, Natural Gas -1.2%, Gold -0.4%, Silver -.5%, Iron Ore -1.2% and Copper -1.7%. A relatively quiet day ahead with the MI Leading Index m/m at 10:30am tomorrow. All eyes will be on the Aussie Employment Change and Unemployment Rate this Thursday.
 

USD

AUDUSD peaked at 0.6788 overnight before falling off in the early hours to open flat on this time yesterday at 0.6764. This comes despite weaker-than-expected Empire State Manufacturing Index figures of -6.6 overnight, showing further worsening of manufacturing conditions in the New York State. Fed Chair Powell spoke overnight, stating the labor market has moved closer to balance, although he remains cautious about signaling exact dates for rate reductions. US equities remained steady to the close with the Dow Jones +0.5%, S&P 500 +0.3% and NASDAQ +0.4%. Tonight, we have Core Retail Sales m/m set to show a slight uptick in figures at 0.1% and the headline figure expected to decrease by -0.3%, being a decrease in consumer spending. With markets split nearly 50/50 in terms of an August Fed rate cut, the Retail Sales figures, paired with next week's inflation figures, could be decisive.
 

EUR

AUDEUR remains above the 0.62 handle, opening flat at 0.6205 after what was a relatively quiet day yesterday with only Industrial Production m/m coming through slightly lower than the previous at -0.6%. Eurozone equities were weaker across the board with the DAX -0.2% and the CAC -0.5%. Tonight, we have the Trade Balance and the ZEW Economic Sentiment expected to come in lower than their respective previous figures. All eyes will be on the European Central Bank interest rate decision on Thursday. The central bank is expected to hold at 4.25% with markets expecting potential cuts in September and December.
 

GBP

AUDGBP opens flat at 0.5214 after a slight decrease in UK’s housing inflation at -0.4%. UK equities closed in the red with the FTSE -0.1%. A quiet day today with no news following a jam-packed day on Wednesday, bringing CPI y/y - expected to continue to fall to +1.9% (lowest in 3 years).
 

NZD

AUDNZD opens flat at 1.1131 after what was a quiet day yesterday following another quiet day today with no news to be announced. The main event will be on Wednesday with the announcement of NZ’s inflation figures, with the CPI q/q expected to slightly decrease to 0.5% from the previous 0.6%.