AUD Gains Ahead of CPI Today

AUD

The Aussie Dollar opens up against most majors following Treasurer Chalmer’s Australian budget announcement last night. Chalmers presented the 25/26 budget and the Treasury’s key economic forecasts before parliament yesterday which included new tax cuts. Treasury forecasts the Unemployment Rate to peak at 4.25%, which is lower than economists once thought possible. Annual economic growth is also expected to pick up from 1.5% this year to 2.25% next year and 2.75% they year after. Equities were relatively flat, SHANGHAI COMP 0%, NIKKEI 0.5% and locally ASX 0.1%. Commodities were mixed, Copper 2.5%, Iron Ore 0.7%, Gold -0.1%, Silver 0%. The AUD is supported as investors anticipate the RBA to keep interest rates unchanged in April, as well as expectations of Chinese stimulus to bolster the Australian economy. Today, we have the monthly CPI indicator which is expected to remain unchanged at 2.5%. A significantly weaker reader would be needed for markets to price in an interest rate cut from the RBA in May (current expectations for a cut at about 70%).
 

USD

The AUDUSD pair opens up at 0.6302 despite a stable USD. Wall Street was flat, DOW JONES 0%, S&P 500 0% and NASDAQ 0.4%. Pretty quiet day yesterday for the US with low tier data. Tonight, the US has Durable Goods Orders M/M which is expected to decrease from 3.1% to -1%. The main event for the week is on Friday night where the Fed has their preferred measure of inflation with Core PCE M/M expected a 0.3%, in line with last month's figure.
 

EUR

The AUDEUR pair is also up this morning at 0.5841. European equities both closed the day up, DAX 1.1% and CAC 1.1%. Germany had their Ifo Business Climate figure last night which came in on expectations at 86.7. Today, the Euro area has fairly low tier data with French Consumer Confidence coming out this evening. Much more data events for the Euro on Friday with French and Spanish inflation, as well as the German Unemployment Rate.
 

GBP

The AUDGBP pair opens flat at 0.4868 as investors await inflation figures this evening. The FTSE closed the day up slightly at 0.3%. It was a quiet day on the data front for the UK yesterday. The UK’s Inflation rate is expected to decrease slightly to 2.9%. A lower reading would help tame fears of stagflation in the UK. Tomorrow, they have Retail Sales M/M expected to have a big decrease from 1.7% to -0.3%.
 

NZD

The AUDNZD pair opens up at 1.0993 this morning. Very quiet week for the Kiwi with no events in the calendar.