Trump Threatens EU With 25% Tariffs
AUD
The Aussie opens weaker against all majors this morning with the biggest drop being against the USD. This comes after Australian consumer inflation printed weaker than expectations yesterday, as well as President Trump talking around tariffs. Asian equities were softer yesterday with the Nikkei, Hang Seng and Shenzhen all falling over -1.0%. The ASX slid -0.7%. Commodities finished off mostly in the red with the biggest mover being Natural Gas -6.8%. Gold and Silver were flat. Yesterday's data showed the monthly CPI indicator rose 2.5% in the 12 months to January, the same rate as last month's reading. Underlying inflation picked up to 2.8% in January, up slightly from 2.7% in December, although a little less than expectations. The data was in line with the RBA's decision to cut the Cash Rate to 4.1% last week. There will be another monthly CPI reading ahead of the next RBA decision. This morning will see out Private Capital Expenditure q/q. Eyes will be on China’s Manufacturing PMIs on Saturday night.
USD
AUDUSD opens weaker this morning at 0.6307, hitting 2-week lows of 0.6295 overnight after President Trump spoke yesterday saying that he would be meeting with Zelenskiy on Friday, and he would make a deal with Ukraine and Russia. In other comments he said that the US would have a good relationship with China and Russia. He sowed further confusion surrounding tariffs, raising hopes for another month-long pause on steep new tariffs from Mexico and Canada, saying the 'could' take effect on April 2, while also threatening that tariffs of 25% would be levied on the EU. Another soft session on Wall St. saw the Dow Jones trading -.5%, the S&P 500 -.3%, and the Nasdaq -.2%. Last night saw US New Home Sales for January fall 10.5% to 657k. Eyes will now turn to their Prelim GDP q/q (exp. 2.3%) and Unemployment Claims (exp. 222k).
EUR
AUDEUR opens weaker this morning at 0.6014 after Australia's CPI printed weaker than expected yesterday. Trump also threatened to slap 25% tariffs on imports from the EU, as he lashed out at the bloc, saying "it was formed to screw the United States". It was a quiet day out of Europe in terms of economic data with only their German GfK Consumer Climate, falling by 2.1 points compared to the previous month. European equities closed in the green with DAX and CAC both +1.5%. Tonight, out for Spanish Flash CPI y/y and the European Central Bank Monetary Policy Meeting Accounts.
GBP
AUDGBP opens weaker this morning at 0.4974, touching 4-week lows of 0.4969 overnight after weaker than expected Aussie inflation data yesterday. It was another quiet day for England. The FTSE finished in the green +0.7%. It will be another quiet 24h ahead with only MPC Member Dhingra Speaking.
NZD
AUDNZD opens a little lower at 1.1066 after hitting lows of 1.1058 overnight. They had no economic data out yesterday. This morning will see their ANZ Business Confidence. No other data for the remainder of the week.