Greenback Bolstered by Stronger Retail Sales
AUD
AUD opens lower against majors after shifts in global risk sentiment caused further sell-offs in our domestic currency. Asian equities finished the day mixed, the Nikkei +0.2% and Shenzhen +0.6%, while the Hang Seng closed -1.6%. The ASX retreated -0.2%, dragged by materials and utilities. Commodities were mostly up with Crude Oil -1.4%, Natural Gas +5.6% Gold +0.4%, Silver +0.2% and Copper -0.15%. Today, we have the Melbourne Institute Leading Index m/m coming out at 10:30am. Tomorrow, we have our main event for this week, being our Employment Change and Unemployment Rate.
USD
AUDUSD opened lower at 0.6732, having dropped to 0.6718 lows overnight off the back of stronger-than-expected US Retail Sales figures, ultimately spurring USD strength. The headline figure came in flat against expectations of a -0.3% fall in spending, with lower automobile and gasoline sales counteracted by a significant pickup in other sectors, including retailers. Another solid night on Wall St. saw the Dow Jones close +1.9%, the S&P 500 +.6% and the Nasdaq +.2%. Tonight, we have a little bit of data coming out with Building Permits and FOMC Member Waller speaking. Looking forward, this week’s main event will be Unemployment Claims and Philly Fed Manufacturing Index on Thursday evening.
EUR
AUDEUR opens near 1-month lows of0.6173 after shifts in global risk sentiment spur further AUD weakness. Yesterday, Germany’s ZEW Expectations was down from previous results (41.8 current vs. 47.5 prior), though beat 41.0 expectations. European equities all ended in the red with the CAC and DAX -0.4%. Today, we have Final Core CPI y/y and Final CPT y/y both forecasted to unchanged at 2.9% (Final Core CPI) 2.5% (Final CPI). The main event globally this week will be tomorrow evening's European Central Bank interest rate decision. The market appears to understand that Eurozone growth remains weak but positive, inflation is falling, and that should allow the ECB to cut rates probably twice here in the second half of 2024. Even so, expectations are of a pause on Thursday, enabling markets to settle and the central bank to consider more economic data ahead of the next decision.
GBP
AUDGBP opens lower this morning at 0.5186 as the AUD weakens off changes in global risk sentiment. It was a quiet day of data yesterday for the Pound, while The FTSE fell overnight -0.3%. Today’s inflation data for June is set to be released, the headline measure will remain around the Bank of England's 2% y/y target in the month, with food and energy inflation remaining weak. Markets are forecasting the CPI to drop 0.1% to 1.9% from 2.0%.
NZD
AUDNZD opens lower at 1.1089 despite this morning's quarterly NZ inflation figure falling short of expectations. The figure printed at +0.4% against expectations of +0.5%. The previous figure was +0.6%. Inflation in the June quarter is typically softer, and relief is expected to be broad-based. Further disinflation is likely in seasonally adjusted terms as well, largely led by a modest fall in food prices. No more data out today for the Kiwi.