AUD Jumps Ahead of US Inflation Gauge Tonight
AUD
The AUD opens strong against the majors with an improved outlook for global risk sentiment. The AUD was helped along with further talk about China's recent stimulus package as the politburo pledged to deploy the "necessary spending" to spark 5% GDP growth this year, as well as providing some funds to big banks for lending. We saw the Nikkei +2.8%, while Hang Seng and Shenzhen closed +4.2%. Locally, the ASX finished +1% as consumer discretionary and info tech outperformed. A mixed performance for commodities with Gold & Silver relatively flat at +0.1%, Natural Gas +1.3%, Iron Ore +2.0%, Copper +3.5% and Crude Oil -3.1%. No data releases for today however Monday next week we will have China’s Manufacturing PMI and Non-Manufacturing PMIs out.
USD
The AUDUSD hit highs of 0.6905 overnight before easing only a little to today's open at 0.6897, being over 1.2% higher than yesterday's 0.6818 lows. Unemployment Claims were 218k in the previous week (expectations were 224k). Final GDP figures and GDP Price Index came in as expected at 3.0% and 2.5% respectively. Equities closed in the green with the S&P 500 +0.4%, Dow Jones and NASDAQ closing at +0.6%. Tonight we will see the Core PCE Price Index, forecasted at +0.2% month-on-month. The Federal Reserve's preferred inflation gauge is expected to show slower price increases and support further rate cuts from the US central bank. As always, any surprise result with this important inflation report will bring notable volatility to currency markets. Next week we will see key data releases for the Manufacturing PMI on Tuesday and Wednesday and Unemployment Claims on Thursday.
EUR
AUDEUR opens slightly higher at 0.6172 despite German GfK Consumer Climate coming in slightly higher at -21.2 than the expected -22.4. European equities showed a strong performance with DAX +1.7% and CAC +2.3%. Today we will see French Consumer Spending expected to decrease at -0.1% from the previous +0.3% and German Unemployment Change expected to increase at 13k from the previous 2K. Monday, we will see potential volatility with the release of German Prelim CPI m/m as well as European Central Bank President Lagarde's talk on monetary policy at the European Parliament, in Brussels.
GBP
AUDGBP stooped to lows of 0.5126 overnight before inching to today’s open at 0.5142, being higher than yesterday's open as the AUD benefits from shifts in China-related market sentiment. The FTSE showed a stable performance slightly higher +0.2%. A relatively quiet day out of the UK apart from the CBI Realized Sales being released today forecasting an improvement in consumer spending at -17 from the previous -27. Next week we will have a relatively busy day with Current Account and Final GDP q/q released on Monday afternoon.
NZD
The AUDNZD opens flat at 1.0903 with no data released yesterday. It's been a very quiet week for the Kiwi Dollar. On Monday, we will see ANZ Business Confidence with markets looking for further developments after a sizeable increase to 50.6 last month.