NZD Bounces on Hawkish Cut
AUD
The AUD comes in mixed today against all majors, opening in similar territory to yesterday after Australia's Wage Price Index q/q printed at +0.7%, just short of +0.8% expectations. Asian equities closed mixed with the ASX coming in at -0.7% and Shanghai Comp +0.8%, commodities also mixed with the biggest shifts being Natural Gas dropping by 2.5% and Crude Oil seeing a slight growth of 0.5%. Today we will be seeing Australia's Employment Change data and Unemployment Rate. Australia's labour market remains strong, with expectations unemployment will only tick up 0.1% to 4.1%. A quiet day tomorrow as well with the only news events being RBA Gov Bullock speaking in relation to the RBA’s monetary decision and the outlook for the economy. She may also discuss the RBA’s efforts to balance inflation and labor market gains.
USD
The AUDUSD opens at 0.6345, practically unchanged and continuing to trend virtually flat over the last 24 hours. Wall St. saw both the NASDAQ and S&P 500 increase by an even 0.2% with the only real news being the Empire State Manufacturing Survey. The headline general business conditions index climbed eighteen points to 5.7 while new orders and shipments grew moderately. This morning, we had the FOMC Meeting Minutes which showed President Donald Trump's initial policy proposals raised concern at the Federal Reserve about higher inflation, with firms telling the U.S. central bank they generally expected to raise prices to pass along the cost of import tariffs, policymakers said at a meeting held about a week after Trump's January 20 inauguration. Early tomorrow morning we have Unemployment Claims being released, forecasted at 215k, above the previous 213k.
EUR
The AUDEUR opens at 0.6084, again practically unchanged and remaining stagnant over the last 3 days with no major data coming out yesterday and today being fairly quiet with only German PPI m/m forecasted to increase by 0.6%. Euro equities both seeing a drop of over 1%, Dax coming in at -1.8% and CAC coming in at -1.2%. Tomorrow, we will see Flash PMIs for the Eurozone. A continuation of the current trend is expected: Contraction in the manufacturing sectors and expansion in the services sectors.
GBP
AUDGBP opens at 0.5042, seeing a small increase despite yesterday's UK CPI data coming in above forecasts. The U.K.’s inflation rate rose sharply to 3% in January, coming in above analyst expectations of 2.8%. There was little impact on currencies as the increase in inflation was largely driven by UK air fares not falling as much as usually seen this time of year. Today will be a quiet one for the Pound, although tomorrow they have their Flash Manufacturing and Flash Services PMIs, with expansion expected in the services sector and contraction expected in the manufacturing sector.
NZD
AUDNZD opens lower at 1.1120 despite the Reserve Bank of New Zealand slashing benchmark rates by 50 basis points to 3.75% yesterday, marking its fourth straight cut, as easing inflation offers the central bank room to boost a sputtering economy. Despite the cut, the NZD actually strengthened as the central bank signaled further moves would be smaller in size and the end of the easing cycle was now not too distant, surprising markets. Both today and tomorrow being very quiet on data with the only event being RBNZ Gov Orr speaking further on yesterday's rate cuts.