China's Deflationary Pressures Deepen
AUD
The AUD opens weaker against all majors after China posted negative inflation for the first time in 13 months. Consumer inflation landed at -0.7% year-on-year and producer inflation showed a -2.2% y/y decline. While the readings were skewed by seasonal distortions, they also serve as a reminder of persistent deflationary pressure in the economy. China has set its 2025 inflation target at 2%, the lowest level in 20 years, as the government seeks to translate stimulus into stronger domestic demand. Asian equities closed lower on Friday with the ASX falling 1.8% and Shanghai Comp down 0.3%. Commodities seeing more of a mixed response with the biggest mover being Natural Gas increasing by 5%, Crude oil also up 1.1% while Gold, Silver and Iron all seeing minor decreases. A relatively quiet week ahead, Tomorrow will bring Westpac Consumer Sentiment and the NAB Business Confidence.
USD
The AUDUSD opens lower at 0.6298 trading primarily sideways over the weekend as the majority of economic data printed near expectations. Wall St saw a positive end to the week with the NASDAQ +0.7%, S&P 500 at 0.6% and Dow Jones 0.5%. Friday night's labour data showed jobs growth was a tad weaker than expected in Feb, though still stable despite Trump's efforts to slash the federal workforce. Nonfarm payrolls increased 151k in the month, Average Hourly Earnings increased 0.3% m/m and the Unemployment Rate ticked up 0.1% to 4.1%. Job gains occurred in health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry. A big week ahead for the Dollar, with consumer inflation, producer inflation and JOLTS Job Openings data set for release.
EUR
AUDEUR opens lower 0.5802, touching 5-year lows of 0.5790 on Saturday after the Euro had its strongest week since 1990 given expectations of increased spending in the Germany economy. Euro equities fell with the Dax coming in 1.8% lower and CAC 0.9% lower. A very quiet week ahead for Eurozone data. Today, nothing significant coming out with only German Industrial Production m/m expected to see some growth since it’s last release. The next European Central Bank interest rate decision will be in mid-April. After cutting rates again last week, only 60% odds are currently priced in for a cut at the next meeting.
GBP
AUDGBP opens lower 0.4871, also seeing a dropping trend since the middle of February. Meanwhile equities remained flat with the FTSE seeing no change. No UK data today. The highlight this week will be monthly GDP on Friday night.
NZD
AUDNZD opens flat at 1.1035. This is coming off the back of a very quiet week for the NZD as well as nothing too major being released this week. Tomorrow morning we'll see Manufacturing Sales q/q.