AUD Buoyed by Strong Employment Figures
AUD
The Aussie Dollar opens stronger against most major currencies (flat against the Pound), with solid commodity performance & strong domestic employment figures. Gold was up 0.3%, Silver up 2.2%, Iron Ore up 0.8% and Copper up 6%. Asian equities saw mild gains, with the ASX closing up 0.2% and SHANGHAI COMP closing up 0.9%. Australia’s employment report was released yesterday, showing a surprising rise in the Employment Change, showing 58.2k, with expectations at 20.2k. The Unemployment Rate rose to 4.2%, with expectations that it would remain unchanged at 4.1%. Markets focused on the Employment Change figures, given the economy added nearly three times as many jobs relative to expectations, with the AUD strengthening in the aftermath. Chinese Industrial Production y/y came in softer at 5.1% expected at 5.2% from 5.3% and the Retail Sales y/y saw a light increase to 2.7%, with expectations of an increase from 2% to 2.6%. This morning, RBA Governor Bullock is speaking at a testimony before the House of Representatives where she will be asked about her monetary policy and future predictions. This hearing could give further insight into the central bank's intentions moving forward.
USD
The AUDUSD sees a small gain over the past 24 hours, briefly pushing up to the 0.6640 barriers before slumping to this morning’s open of 0.6612. Wall Street managed to finish in the green, with the DOW JONES closing up 1.4%, S&P 500 closed up 1.5% and the NASDAQ is leading the charge, closing up 2.3%. Retail Sales were released last night and managed to beat the forecasts, with Retails Sales m/m coming in 0.6% higher than expected, and the Core figure also lifting by 0.3% over expectations. This is the most acceleration in Retail Sales since July 2023, showing that the consumer is resilient even in the face of high prices and borrowing costs, which could allow the Fed the room to have a slower cutting cycle if they deem it necessary. US Unemployment Claims came in modestly better, being 9k under expectations. Manufacturing Indices saw a mixed bag, with the Empire State coming in better at -4.7, expected at -5.9 from -6.6 and the Philly Fed fell to -7, with expectations of 5.4 from 13.9. Looking forward we have Building Permits released tonight, expected to mildly contract to 1.43m, and Prelim UoM Inflation Expectations, with no forecasts as of yet, previously at 2.9%.
EUR
The AUDEUR sees a solid gain, tracking up to reclaim the 0.60 barrier mid-day, opening this morning at a rate of 0.6025. European equities finished the day up, with the DAX closing up 1.6% and CAC up 1.2%. It was a quiet day yesterday, with no news released. There is only one piece of data for the rest of the week being the Trade Balance tonight, expected to increase from 12.3B to 13.3B.
GBP
The AUDGBP manages to open the day flat, with the pair seeing light gains in the morning, before giving them up in the overnight session, opening this morning at 0.5140. British equities saw a mild gain, with the FTSE closing up 0.8%. Yesterday their GDP was released, coming right on expectations, with the GDP m/m flat (previously +0.4%) and Prelim GDP q/q at +0.6% (previously +0.7%). This data is showing that their growth is stalling, whilst their first half of 2024 showed positive growth, this recent performance will add pressure to the BOE to add further rate cuts this year. This afternoon, Retail Sales m/m are set to be released, with expectations of an increase from -1.2% to 0.6%.
NZD
The AUDNZD pushes higher yesterday, pushing back through the 1.10 barrier to a 16-day high, opening this morning at a rate of 1.1054. Yesterday we had RBNZ Governor Orr speaking in a series of 4 talks this week, continuing on with the rhetoric mentioned in his earlier talks, towing a dovish line. He noted price behavior is in line with low inflation and that removing monetary policy restraint is appropriate for now. He will also be speaking at 12:30 today at an event hosted by the Wellington Chamber of Commerce. Audience questions are expected - these sometimes bring currency volatility, depending on the nature of central bankers' answers.