AUD Jumps on Domestic Jobs Growth
AUD
The Aussie Dollar finds some respite over yesterday's session off the back of stronger Aussie jobs data and potential US-China Trade talks, opening this morning higher against most majors. Commodities on the other hand closed mixed with Crude Oil +0.3%, Natural Gas -1.2%, Gold -0.1%, Silver -0.2%, Iron Ore +0.1% and Copper +1%. Asian equites were mainly lower with the ASX -1.1%, Nikkei -1.2% and Shanghai Composite flat. Yesterday, we saw local employment figures with Employment Change strongly beating expectations of 19.4k at 44k, however, still lower than previous readings of 60k. The Unemployment Rate ticked up 0.1% to 4.1%. Overall, the resilient in Australia's labour market reinforces expectations that the Reserve Bank of Australia will deliver a shallow easing cycle. Out of China saw both the 1-y and 5-y Loan Prime Rates, again both coming in on expectation and seeing little reaction by markets. This morning, RBA Governor Bullock, Deputy Governor Hauser and Assistant Governors Hunter and Jones will face a parliamentary grilling after Tuesday's interest rate cut - The first cut in over 4 years. Notably, Bullock warned distressed mortgage holders against expecting successive relief and said markets were 'far too confident' about future rate cuts.
USD
The AUDUSD pair soared higher overnight, gaining 1% to hit 9-week highs of 0.6403 as the USD weakened due to murmurs of US-China trade talks, opening this morning at 0.6393. US President Donald Trump has hit the wires saying a fresh trade deal with China is ‘possible’, suggesting he may be open to easing tensions between Washington and Beijing, prodding downward pressure on the USD overnight. Wall Street closed yesterday in the red with the Dow Jones -1.3%, S&P 500 -0.7% and Nasdaq -0.6%. Last night we saw Unemployment Claims come in relatively flat at 219k, the Philly Fed Manufacturing Index ticked slightly lower at 18.1 and Crude Oil Inventories missed expectations of 3.2M at 4.6M. Looking to the night ahead, we will see President Trump speak again, followed by Existing Home Sales, Revised UoM Consumer Sentiment and most importantly Flash Manufacturing and Services PMIs.
EUR
The AUDEUR broke through the 0.61 handle overnight, seeing highs of 0.6113 before dropping off but still opening higher this morning at 0.6093. European equities closed mixed yesterday, with the DAX -0.5% and CAC +0.1%. Yesterday we saw a fairly quiet session for the Eurozone, only having seen the German PPI m/m which missed expectations of +0.6% coming in at -0.1% (flat from previous reading). Tonight, we have German, French and Eurozone Flash Manufacturing & Services PMIs with most expected to tick slightly higher. Also of note, on Sunday we will observe the German Federal Elections.
GBP
The AUDGBP starts the day slightly higher, opening this morning at 0.5053. British equities closed in the red yesterday, with FTSE losing -0.6%. A quiet day for the British yesterday, having only seen CBI Industrial Order Expectations which came in slightly better than market expectations. A big day ahead for Great Britan with the three main events coming in the form of Retail Sales m/m, Flash Manufacturing PMI and Flash Services PMI. Retails sales are expected to tick higher 0.7%, with markets anticipating a reading of +0.4%. However, Flash Manufacturing & Services PMIs are expected to remain relatively flat.
NZD
AUDNZD opens a tad lower at 1.1103 after touching 1.1133 highs in yesterday's session. The main NZD event this week was the RBNZ interest rate cut. This marked the fourth straight cut and brought the policy rate to the lowest level since 2022, although the NZD strengthened in the aftermath as the central bank signaled that future cuts would be smaller in size and that they may be near the end of the easing cycle.