AUD Steady with Tarriff Uncertainty
AUD
The AUD opens fairly flat against the majors amidst the current volatility and uncertainty in global markets. Asian equities closed higher again on Thursday: The ASX fell -0.6% with utilities and energy down over -2.0%, the Hang Seng up +3.3%, Shenzhen up +0.8% and the Nikkei up +1.4%. Commodities were fairly mixed with the biggest movers being Natural Gas -7.1% and Cotton up 2.4%. Locally we saw the Building Approvals m/m come in much higher than forecasts at 6.3% as well as our Goods Trade Balance printing at 5.62B. Over the weekend China has their CPI y/y expected at -0.4% and PPI y/y forecasted at -2%. The risk for the AUD still remains in the hands of the ongoing global trade wars as the ongoing uncertainty continues to impact risk-sensitive currencies such as the AUD.
USD
The AUD USD opens at 0.6333 trading mainly sideways for the last 24 hours. Overnight we saw the unemployment claims figures come in slightly better than forecasted at 221K. We also saw President Trump speak about his latest executive orders at the White House, although what was stated was not significant enough to move markets. The volatile conditions on Wall St. continued overnight which saw the Nasdaq trading -2.7%, the S&P 500 -2.0%, and the Dow Jones -1.3%. Looking forward we have more employment data out of the US with their Non-Farm Employment Change expected to print at 159K, as well as their Unemployment Rate expected to remain unchanged at 4%.
EUR
The AUD EUR opens at 0.5872 essentially flat from yesterdays open. This comes off the back of the ECB cutting rates by 25bps as widely expected, though there were some hawkish notes in the accompanying statement with monetary policy seen to be “meaningfully less restrictive”. and hinting at uncertainty going forward with the possible imposition of tariffs which she described as” a net negative”. More importantly she indicated that there will likely be a pause regarding monetary policy in the coming months. European equities were up with the Dax +1.5% and the CAC +0.3%. Looking forward we have German Factory Orders and French Trade Balance out today.
GBP
The AUD GBP opens flat at 0.4915 after having their monetary policy report hearings. Governor Bailey mentioned that the vote for their most recent rate cut was based on the disinflation story holding, furthermore he believes that there is less chance of second round inflation due to the weakening economy. Furthermore, their construction PMI came in at 44.6 missing forecasts of 49.5. Equities saw the FTSE down by -0.8%. Looking at upcoming data, today we have the Halifax HPI m/m
NZD
The AUD NZD opens at 1.1029 where we saw a slow decline by about 20 basis points over the last 24 hours despite having no news in the last 24 hours. In terms of upcoming data, it remains quiet until Tuesday where they have their Quarterly Manufacturing Sales.