AUD Falls as Chinese Factory Activity Contracts

AUD

The AUD opens lower against most of the majors, weakening yesterday after China released some softer PMIs. Asian equities started the week spread, Nikkei -0.9% and Shenzhen 300 -0.4%, while the Hang Seng gained +0.7%. Locally the ASX 200 was closed for the Australia Day Holiday and will resume trading today. Commodities were down across the board apart from gold and silver up 0.2% and 0.5%. Chinese PMIs missed expectations yesterday, the Manufacturing PMI was 49.1 Non-Manufacturing was 50.2. This puts more pressure on Beijing to increase their level of stimulus in China. Today we’ve got NAB Business Confidence. Tomorrow’s inflation report will be the main event for the week.
 

USD

AUDUSD opens flat at 0.6290, falling over the weekend from highs of 0.6325. This came after risk sentiment took a hit with China releasing a low-cost AI model over the weekend, which saw Wall St tumble. Nasdaq trading -3.7%, the S&P 500 -1.9%, and the Dow Jones +.5%. On Friday night US PMIs showed output growth slows in January and price pressures rise, but employment jumps higher on sustained optimism. Manufacturing PMIs came in at 50.1, services came in at 52.8. Overnight we will see Durable goods orders m/m and CB Consumer Confidence
 

EUR

AUDEUR hit lows of 0.5975 yesterday afternoon before clawing back some recent losses to open 0.5996. European equities opened weaker across the board too. Stoxx 50 -1.5%, DAX -1.2%, CAC 40 -0.9%. On Friday night, PMI data showed the Manufacturing sector still contracting (46.1) and Services sector still growing (51.2). Overall, a quiet week for Euro data, on Wednesday night we’ll see private loans and money supply data.
 

GBP

AUDGBP hit highs of 0.5101, in the early evening on Friday, it has since steadily declined over the past few days to open 0.5034. The FTSE closed -0.3%. On Friday we saw UK PMIs which both exceeded expectations (Manufacturing 48.2, Services 51.2). Even though business activity edged up, job cuts continue as cost inflation hits 20-month high. Another quiet week for the pound, later this morning will see BRC Shop Price Index y/y.
 

NZD

AUDNZD kept a tight range over the past few days, kicking off the week at 1.1055. Two bits of NZ data this week: The Trade Balance and ANZ Business Confidence on Thursday.