Risk Recedes as Trump Delays Reciprocal Tariffs
AUD
The Aussie Dollar sees a varied result over yesterday’s session off the back of Trump tariff announcements, opening this morning mixed against the majors. Asian equities saw a mixed performance with the ASX +0.1%, Shanghai Comp -0.4% and Nikkei +1.3%. Commodities also saw a varied performance with Crude Oil -0.1%, Natural Gas -8%, Gold +0.1%, Silver +0.5%, Copper +1.6% and Iron Ore flat. A quiet day yesterday for local data, only seeing MI Inflation Expectations which ticked 0.6% higher than prior readings to come in at 4.6%. Looking to the day ahead we have tentative Chinese data to be released in the form of New Loans and M2 Money Supply y/y. Other than that, nothing of importance out until Tuesday’s interest rate announcement from the Reserve Bank of Australia.
USD
The AUDUSD ticks higher, reclaiming the 0.63 handle off the back of Trump’s rhetoric surrounding tariffs, opening this morning at 0.6317. President Trump announced his plan for reciprocal tariffs, saying “what they charge us, we will charge them” and indicating that cars, chips and pharma would be at a higher rate. He also indicated that a range of non-tariff trade barriers would be targeted. The USD briefly made gains in response though the move was heavily reversed as Trump then posted that reciprocal tariffs will be delayed and may take effect some months later. This helped most majors move higher against the greenback. Wall street also had a positive reaction to this statement with S&P 500 and Dow Jones +0.8% whilst NASDAQ gained 1.1%. On the data front, US PPI for January printed at 0.4% m/m and 3.5% y/y, higher than expectations of 0.3% and 3.3% with core measures also largely higher than forecasts. US weekly Jobless Claims were better than expected with initial claims falling to 213k to beat forecasts of 216k. Limited reaction to the data. Looking to the night ahead, the two main data come in the form of Core Retail Sales and Retail Sales m/m – both expected to fall from previous readings.
EUR
The AUDEUR pair opens relatively flat this morning, opening at 0.6039. European equities saw a strong performance yesterday, with DAX +2.1% and CAC +1.1%. Another quiet day for the Eurozone, with German Final CPI m/m coming in bang on expectations of -0.2% and Industrial Production m/m came in slightly worse than the expected -0.6% at -1.1%. Looking at the day ahead we await some more low/mid- tier data in the form of Eurozone Flash Employment Change q/q and Flash GDP q/q as well as German WPI m/m.
GBP
The AUDGBP loses around 20 basis points yesterday, opening this morning lower at 0.5027. British equities closed lower with the FTSE losing half a percent. Yesterday we saw a slew of data releases out of Great Britain with the two most prominent releasing coming the form of their Prelim GDP q/q and GDP m/m. Prelim GDP was expected to drop from 0% to -0.1%, however came in above expectations at +0.1%. Similarly, GDP m/m also bray forecasts of 0.1%, coming in at +0.4% - first time since July last year the figure read above market expectations. No data expected to be released today.
NZD
The AUDNZD pair sees minimal movement, opening this morning flat at 1.1125. Yesterday we saw Inflation Expectations q/q read relatively flat, with the last reading being 2.12% and the current reading coming in at 2.06%. This morning, we saw their BusinessNZ Manufacturing Index come in at 51.4 vs previous 46.2 and their FPI m/m read at 1.9% vs a previous 0.1%.