Solid US Jobs Data Support Rate Hike Narrative

AUD

AUD continues to feel the after-effects of last week's reluctance from the RBA to align the timing of interest rate hikes more closely with market expectations. Asian equities were mixed leading into the weekend, the ASX performing strongly and closing up 0.4%. Commodities were also strong with Iron Ore, Gold and Silver all posting gains however the AUD was unmoved by what would normally be supportive price action. Today will be a slow start to the week with no local data due for release, however things should pick up on Wednesday with Chinese inflation data and then the main local piece of data for the week; Thursday's  Aussie employment report. Markets are expecting an uptick in the Unemployment Rate to 4.8% and an increase of 50k jobs reflecting the start of easing of restrictions in NSW.

USD

AUD opens at similar levels to Friday this morning, 0.7394 at time of writing having dipped as low as 0.7360 in late trade on Friday. US equities enjoyed an upbeat mood with the NASDAQ and S&P500 both comfortably higher. The US Non-Farm Employment Report was also better than expected in October, jobs numbers increased by 531k beating expectations of a 450k increase and the Unemployment Rate fell to 4.6% (4.7% expected) with the participation rate unchanged MoM at 61.6%. Commentary from the Fed's George said bottlenecks contributing to high inflation will persist well into 2022 amid broadening price pressures, suggesting officials should not wait too long to respond. The USD failed to take full advantage, with strong commodities assisting AUD to avoid losses. Looking ahead and it's a busy week, with Fed Chair Powell hitting the wires twice as well as the US inflation figures die on Wednesday night.

EUR

AUD is almost unchanged from Friday here, opening at 0.6396 having briefly reclaimed the 0.64 handle on Saturday morning. European equities finished up despite disappointing data prints; most significantly Retail Sales falling by 0.3% in September which was worse than the expectations of just a 0.2% decrease. The ECB is probably amongst the most dovish of the main central banks and these retail sales figures perhaps justify some of the downbeat assessment of the region. Industrial Production numbers added to the ECB's woes, with the German and French measures both showing a monthly contraction of 1.1% and 1.3% respectively. ECB President Lagarde will have next an opportunity to address markets tomorrow night in what is due to be a relatively quiet week for data from The Zone.

GBP

AUD opens against GBP at 0.5473 this morning after lacklustre trading into the weekend. BoE Gov Bailey will be busy this week, due to speak twice with market participants keen to garner further details developments regarding the BoE's decision last week to leave interest rates unchanged. Apart from the central bank speak, Wednesday's GDP number will be the highlight for the week ahead.

NZD

NZD getting the better of AUD at the moment which has surrendered the 1.04 handle, trading at 1.0389 at time of writing which represents 5 week lows. The AUD clearly feeling the hangover from last week's disappointing RBA appraisal of inflationary pressures in the Aussie economy, especially since the RBNZ actually raised interest rates in NZ at their most recent opportunity last month. Thursday morning will see the release of the Food Price Index from across the ditch, markets expecting an increase 0.5% in what is the only major piece of data scheduled for release.