ECB Holds Key Interest Rate
AUD
With risk sentiment remaining soft overnight, the Aussie Dollar opens this morning mixed against the majors. Asian equities closed yesterday mixed with the ASX -0.3%, Shanghai Comp +0.5% and Nikkei -2.4%. Commodities were mainly lower with Crude Oil -0.6%, Gold -0.5%, Silver -0.7%, Iron Ore -0.6%, Copper -3.3% and Natural Gas which was the only commodity in the green closing at +3.1%. Yesterday brought Aussie labour data, with the Employment Change printing at 50.2k, higher than previous readings of 39.5k and comfortably above expectations of 19.9k. The Unemployment Rate gained 0.1%, as expected, to read at 4.1%. With many full-time and part-time jobs added recently, as well as sticky domestic inflation, the RBA is expected to adopt a slightly hawkish tone moving forward. Looking ahead, tonight we only have one low tier data release in the form of the CB Leading Index m/m. On Monday, we'll see China's key interest rate decisions.
USD
After giving up about 25 bps over yesterday's session, AUDUSD fell to 0.6697 lows early this morning before recovering a little to open at 0.6705. US equities all closed lower with the Dow Jones -1.3%, S&P 500 -0.8% and NASDAQ -0.7%. US weekly Unemployment Claims data was worse than expected with initial claims rising to 243k (exp. 229k). On a more positive note, the Philly Fed Business Outlook Survey for July rose to 13.9, up from 1.3 and beating expectations of 2.9. Looking to the day a head there are a series of FOMC members speaking with the main speech expected to come from Member Williams. The back end of next week will be big for the USD, bringing Flash PMIs, GDP and the Core PCE Price Index (The Fed's preferred inflation gauge).
EUR
Despite trading around a 40-pip range over yesterday’s session, the AUDEUR opens this morning flat at 0.6152. This comes after somewhat neutral commentary from European Central Bank President Lagarde after having kept the key Eurozone interest rate steady at 4.25%, as expected. In the ECB Press Conference, Lagarde noted that domestic inflation remained high and labour markets remained resilient though risks to the economic outlook were now tilted to the downside. In terms of forward guidance, she noted that the question of what to do in September was wide open with more information to be obtained prior to the decision. Equities had a mixed reaction with the DAX closing -0.4% and CAC closing +0.2%. Looking to the night ahead we will only observe two low-tier releases in the form of German PPI m/m and the Current Account.
GBP
AUDGBP pushed towards the 0.52 handle yesterday, reaching 0.5190 highs before falling off to open flat this morning at 0.5175. British equites ticked slightly higher on close with the FTSE +0.2%. Last night we saw employment data out for the UK with the Claimant Count Change missing expectations of 23.4k, coming in at 32.3k and indicating more people are applying for unemployment benefits. Average Earnings Index 3m/y came in on expectation at 5.7%, losing 0.2% since the last reading, we also saw the Unemployment Rate remaining flat at 4.4%. Looking ahead, tonight we will observe the monthly Retail Sales which are forecasted to fall by -0.6%.
NZD
The AUDNZD gained around 25 basis points over yesterday’s session, opening higher this morning at 1.1093. Yesterday we saw no data releases, however, this afternoon we await the Credit Card Spending y/y figures.