USD Firms on Resilient Jobs Market
AUD
The Aussie Dollar opens flat / a little lower against most majors given increased demand for the USD after a hot US jobs report on Friday evening. Asian equities closed in the red on Friday with ASX -0.4%, Shanghai composite -1.3% and Nikkei -1%. Commodities fared slightly better, closing mostly higher with Crude Oil +3.6%, Natural Gas +0.1%, Gold +0.8%, Silver +0.9%, Iron Ore +1.7% and Copper-0.5%. A quiet weekend in the way of Asian data with nothing released over the weekend. Looking to the day ahead, we will see some low-level local data in the form of ANZ Job Advertisements m/m and the MI Inflation Gauge m/m. Chinese December export growth may also be released today and could show a pickup to around 7% y/y as exporters rush to make shipments before Trump's tariffs arrive. We also attentively await Chinese New Loans as well as M2 Money Supply y/y. Looking to the week ahead our main event locally will be Thursday’s employment data and for China we await their GDP, Industrial Production and Retail Sales on Friday.
USD
AUDUSD dropped to new lows not seen since April 2020, briefly touching 0.6139 before opening this morning at 0.6143 after Friday's strong jobs data added to the case for a Fed easing pause. Wall Street responded accordingly with the Dow Jones and NASDAQ both -1.6% and S&P 500 -1.5%. The monthly US employment report was released with numbers stronger than expected. Headline employment rose by +256k against expectations of +165k, with the Unemployment Rate coming in at 4.1% against 4.2% expectations. Broad based USD strength gripped the market with the yield on the US 10-year note climbing 10 bps to 4.78%. Notably, the market is now pricing the next full Fed Cut to be in October, out from June just prior to the print. No data out today. Notably this week on Thursday morning we will observe their CPI release and on Friday we have their retail sales and Unemployment Claims.
EUR
The AUDEUR pair opens slightly lower this morning, losing about 0.3% to open this morning at 0.5999. European equities closed lower on Friday with DAX -1.5% and CAC -0.8%. On Friday we saw French Consumer Spending and Industrial Production m/m both beating market expectations and Italian Retail Sales m/m missing forecasts by 0.6%, little reaction from markets. No data out today, and not much to look forward to this week.
GBP
With no data to support any movement, the AUDGBP opens flat this morning at 0.5024. British Equities closed lower on Friday, with the FTSE losing 0.9%. No data out on Friday or the weekend, however we did see MPC Member Breeden speak where she reiterated the stance that she is willing to continue with further cuts to interest rates. No data out today. Looking at the week ahead, the main events for the GBP include Wednesday’s CPI, Thursdays GDP and Fridays Retail Sales.
NZD
The AUDNZD remains relatively flat over the weekend, opening this morning at 1.1054. No data out on Friday or the weekend, this morning we saw Building Consents m/m tick higher from -5.2% to +5.3%. Looking to the week ahead we will only see some low-tier data scattered.