AUD Advances Ahead of Today's Jobs Report
AUD
The AUD opens up against the majors with key inflation readings coming in below expectations out of the US and the UK. The AUD was also supported by strong commodity performance and a favorable shift in global risk sentiment, seeing the majority of equities gain traction. In geo-political news, reports hit the wires that a ceasefire and hostage deal had been reached between Israel and Hamas with details said to be announced although there has not been much reaction from markets. No news locally in the last 24 Hours. Asian equities ended the day mixed, Nikkei -0.1%, Shenzhen -0.6% and Hang Seng +0.3%. Biggest movers in commodities were Crude Oil up 4% and Copper up 1.4%. The ASX 200 struggled as it closed -0.2%. Today we have our Unemployment Rate which is expected at 4% and the figures will be closely watched by the Reserve Bank of Australia as it determines whether it can cut interest rates in February, as well as our Unemployment Change which is expected at 14.5K, previously printing at 35.6K.
USD
AUDUSD opens up at 0.6225 after CPI printed at 0.2% coming in softer than forecasts of 0.3%. Following the data release we saw the pair rally 0.7% before retracing and settling. The US is finally seeing some inflation relief although the trend still seems too hot for the Federal Reserve. Given this reading, it seems that the Fed is likely to extend its rate cut pause beyond March. Furthermore, Empire State Manufacturing Data printed well below expectations at -12.6. Wall St spurred off the back of the CPI release with the Nasdaq trading +2.5%, the S&P 500 +1.9%, and the Dow Jones +1.8% late in the North American session. U.S. 10-year yields fell 14bps to 4.65%. Looking forward we have Core Retails Sales out tonight which is expected at 0.5%, up from last reading 0.2%.
EUR
AUDEUR opens higher at 0.6048. Yesterday we had Industrial Production figures out of the Eurozone coming in at 0.2%, missing expectations of 0.3%. Eurozone industrial production has shown consecutive growth for the second month, with October's figures revised upwards to a 0.2% increase. However, this follows a substantial drop in September, making it uncertain whether manufacturing will have positively impacted GDP growth in the fourth quarter, hence not much of a reaction from currency markets. European equities opened mostly higher across the board, Stoxx 50 +0.1%, DAX +0.4%, and CAC flat. Moving forward we have Italian trade balance forecasted at 4.5B and the German Final CPI m/m.
GBP
AUDGBP opens at 0.5082, up 0.3% from yesterday off the back of more soft inflation data. The CPI y/y print came in at 2.5%, missing expectations of 2.6% as well as Core CPI y/y also landing softer at 3.2% below expectations of 3.4%. Following the release of the inflation data, investors have become more confident that interest rates will be lowered next month. They are also anticipating a second interest rate cut before the year ends. The FTSE was up 1.2%. This evening, we have GDP m/m expected at 0.2% up from readings of -0.1%. The results from the GDP figure will definitely weigh in on the BOE’s decision on whether they will cut rates next month, so investors will pay close attention.
NZD
AUDNZD opens at 1.1079, up from yesterday. News-wise the NZD has been fairly quiet with nothing out yesterday. The Food Price Index m/m came in at 0.1% after being expected at -0.1%. Looking forward we have the Business Manufacturing Index tomorrow morning which previously came in at 45.5.