Jobs Data Center Stage Ahead of Fed Cuts
AUD
The Aussie Dollar has resisted recent downward pressure, opening either higher or flat against most major currencies with the exception of the NZD after the RBA remained hawkish with no signal to rate cuts in the near future. The Aussie Dollar struggles to gain much momentum however, as weak Chinese manufacturing data as well as unrest in the middle east is weighing on any major gains. Asian equities finished the day mixed with Shanghai Comp 0.1%, Nikkei -1.1% and ASX 0.4%. Commodities were mainly up with Gold 0.2%, Silver 0.2%, Iron Ore 1.5% and Copper 1.5%. Yesterday we had the Australian Balance of Trade print come out at 6.009B which was considerably more than the $5b that was expected despite shipments to China decreasing by 16.1%. RBA Governor Bullock as spoke yesterday and had a very aggressive stance on inflation and the dangers that it poses to the economy. She reiterated that the board does not foresee being in a position to cut rates in the near future, further strengthening expectations that the RBA will be one of the last G10 central banks to begin cutting rates. Today, we have some low tier data with Home Loans MoM and Investment Lending for Homes.
USD
The AUDUSD saw some modest gains after a recent slump this week, opening up at 0.6738 this morning on the back of weak labour figures and the RBA’s solidified hawkish stance. Wall Street was mixed with the Dow Jones -0.5%, S&P -0.3% and NASDAQ 0.3%. Low tier US job data came in a little weaker than expected, potentially signally a softer than expected labour market. The key bit of data for the week is Non-Farm Payrolls at 10.30pm tonight. This is the main job indicator in the US and the biggest mover of markets. This is going to be even more relevant for tonight’s reading as Fed Chairman Jerome Powell gave employment a lot of attention in his last speech. Expectations are for 160k added jobs up from 114k last month. However, after most of the lower tier job data coming in weaker than expected, we could see this come in lower than expected, further putting downward pressure on the USD. The Unemployment Rate is expected at 4.2% which would be a little tighter than the previous 4.3% reading. Overnight, Fed Members Waller and Williams are speaking, so it will be interesting to see his stance after the Non Farm print comes out tonight.
EUR
AUDEUR opened relatively flat this morning and is currently sitting at 0.6066. European equities were down with DAX -0.1% and CAC -0.9%. Yesterday, we had Eurozone Retail Sales MoM which printed on-expectations at 0.1% hence no real market move. Later today we have Eurozone GDP prints with QoQ expected at 0.3% and YoY expected at 0.6%. The next major event is the ECB Interest Rate Decision next Thursday.
GBP
AUDGBP opened up flat at 0.5113 with no real movement over the last 24 hours. The FTSE was down slightly at -0.4%. Yesterday we had some low tier data out of Britain with S&P Global Construction PMI that came out at 53.6 compared with expectations of 54.9. Today we have Halifax House Price Index prints with MoM expected at 0.2% and YoY expected to come out at 4.2%. The main bit of data to look out for next week is GB Unemployment Rate which was at 4.2% in August.
NZD
AUDNZD opened slightly lower and is currently sitting at 1.0832 after hitting highs of 1.0874 and lows of 1.0820. It has been a quiet week for NZ in terms of data events and the next one of note is the Business NZ PMI - which comes out next Friday.