Ukraine Tensions Dominating Markets
AUD
The Australian Dollar is trading lower against the majority of its peers this morning. There were multiple forces at play which may have moved the Aussie dollar, chiefly being the release of the Unemployment data yesterday morning. Whilst the Unemployment Rate maintained a rate of 4.2%, there were 13K more people employed in January then in December. Local equities had little reaction however with the ASX closing up 0.2%. Asian equities mirrored the lackluster momentum with the Shanghai Comp closing up 0.1%. Commodities saw a significant downturn with Iron Ore & Copper closing down 3.8% & 0.6% respectively. Looking ahead there is little in the way of local and Chinese news however it must be noted that the ongoing escalations in Ukraine introduced significant volatility on the Aussie dollar across the board yesterday afternoon and overnight. Unsubstantiated reports late yesterday afternoon of Ukraine firing mortars at Russian forces quickly dipped the AUD, which shows that any escalation will almost certainly send AUD lower quickly. Furthermore, the G20 summit is expected to kick off today and no doubt the pandemic and the escalation in Ukraine will no doubt be on the agenda.
USD
AUDUSD is trading at 0.7188 this morning after recouping some its losses suffered yesterday afternoon. Alongside the slew of data released from the US, the escalation in Ukraine yesterday afternoon provided adequate pretext for volatility (see above). Overnight US weekly jobless claims data was somewhat mixed with initial claims increasing from 225k to 248k compared to expectations of a fall to 218k while continuing claims fell from 1.619 mio to 1.593 mio compared to expectations of a decline to 1.605 mio. Also released and the Philly Fed Business Survey for February fell to 16.0 from, 23.2, weaker than expectations of 20.0. US equities also reacted negatively to the tensions in the Ukraine and mixed data with both the S&P 500 & Dow Jones closing down 1.8% & 1.5% respectively. Looking ahead the US will release its monthly existing homes sales figures for the month. FOMC Members Mester, Williams & Brainard will speak tomorrow. No doubt however that the ongoing G20 summit & tensions in Ukraine may be a stronger driver of markets going into next week.
EUR
AUDEUR is trading flat at 0.6326 this morning after nervous trade attributable to Ukrainian tensions. The ECB economic bulletin was bullish on continuing recovery of the labor market and is improving further but found that growth is likely to remain subdued in the first quarter of 2022. European equities were mixed on the open but the DAX & CAC both closed down 0.7% & 0.3% respectively. Looking ahead there is little in the way of data save the French CPI for February and Eurozone Current Account figures. No doubt the topic which will be the center of market activity in Europe will be the G20 the standoff in Ukraine.
GBP
AUDGBP is trading slightly lower at 0.5275 this morning in quiet trade. There was no data of note coming out of the UK however the FTSE 100 mirrored its European counterparts and closed down 0.9%. Looking ahead aside from the monthly Retail Sales figures to be released tonight, the G20 and Ukrainian tensions are expected to take center stage in the markets.
NZD
AUDNZD is trading lower at 1.0742 this morning after rebounding from even deeper lows this morning. There was no data of note however the pair felt the same shockwave as its other counterparts and is likely that the G20 and Ukrainian tensions may be driving factor going into next week. Also on Wednesday next week is the RBNZ's next interest rate decision. Markets expecting a further 25 basis point interest rate hike.