RBA Holds Steady as Inflation Remains in Focus
AUD
The Aussie Dollar sees some buoyancy against the majors, with a retracement of the drop that was seen yesterday with a lackluster RBA release. The RBA left its policy rate unchanged at 4.10%, as widely expected. The commentary noted they remain cautious about the prospects for further easing, but inflation data is progressing as per their February forecasts. Policymakers reiterated that monetary policy remains restrictive and that confidence is needed to ensure inflation continues on its downward path. Some economists are expecting the most likely path is for RBA rate cuts in August and November. Commodities were mostly higher, with Oil closing down 0.4%, Nat Gas gaining a huge 5%, Gold, up 0.3%, Silver up 0.2%, Iron Ore up 0.1% and Copper was flat. Asian equites saw solid gains too, with the ASX closing up 1%, and the SHANGHAI COMP closing up 0.4%. Retail Sales m/m also came out locally yesterday, growing 0.2%, short of 0.3% expectations. Today will be quiet locally, with Building Approvals set to drop to -1.4% from 6.3%.
USD
The AUDUSD sees some growth overnight, pushing through the 0.6280 barrier early this morning, opening at a rate of 0.6284. Wall Street was mixed into the close, with the S&P 500 closing flat, DOW JONES closing down 0.2% and NASDAQ up 0.6%. There was some data out overnight, with Final Manufacturing PMI coming in expansionary at 50.2, 0.4 higher than expected, balanced by the ISM Manufacturing PMI being contractionary at 49, 0.5 lower than expected. JOLTS Job Openings were only slightly under the 7.69m expectations, coming in at 7.57m. Tonight will see the ADP Non-Farm Employment Change coming out, expecting a large lift to 118k from 77k. The biggest piece of data will be Trump’s “Liberation Day”, rolling out 7am tomorrow. This will see the new proposed tariffs going into effect. Previously, he has removed or pushed back dates, so there is a fair bit of uncertainty in the markets, giving chance to volatility, especially how impacted nations will implement reciprocal tariffs.
EUR
The AUDEUR rallies over the past 24 hours, seeing the pair reclaiming the 0.58 barrier, opening this morning at a rate of 0.5818. European equities finished the day strong, with the DAX finishing up 1.7% and the CAC up 1.1%. Last night saw the release of Manufacturing PMI’s out of several European nations, all coming in contractionary, and some even lower than expected. The main news is the inflation figures, with the CPI Flash Estimate y/y coming in expected at 2.2% and the Core figure came in lower at 2.4%, expected to come in at 2.5% from 2.6%. This would be of relief as the proposed expansionary spending of up to 1 trillion dollars, would obviously have a hugely inflationary effect, allowing much needed economic boost in the Eurozone not to be hampered by inflation. Tonight, will be a quiet night, with Spanish Unemployment Change ahead, expected to lightly decrease to -2.5%.
GBP
The AUDGBP opens the day higher, with the pair seeing consistent gains since yesterday, opening this morning at 0.4860. The British equites saw adequate gains into the close, with the FTSE closing up 0.6%. The Final Manufacturing PMI came out last night, coming within expectations, not impacting markets. There is no data out tonight, and no key pieces until Friday, where their Construction PMI is released.
NZD
The AUDNZD opens the day flat, with the pair keeping mostly sideways during yesterday’s trading session, opening this morning at a rate of 1.1007. GDT Price Index saw a 1.1% rise, previously 0%, and Building Consents m/m fell from 2.6% to 0.7% overnight. There is no data to be released out today.