AUD Buoyant As Commodities and Equities Ris
AUD
The Aussie dollar has had a mostly positive session against the majors spearheaded by positive equities data worldwide, stronger commodities and a softening (albeit still very strong) US Dollar. Commodities also finding strong gains on the close, with Natural Gas up over 12% and Coal markets posting strong gains. Our own Commodities make mild gains with both Gold and Iron Ore printing in the black, up 0.1%. Local Regional Equities were higher across the board on the close, despite Shanghai reporting the highest number of Covid cases since May. The ASX finished Thursday’s session up 0.8%, the Shanghai Comp up 0.3% and the NIKKEI fairing strongest up 1.5%. Yesterday afternoon we saw the Trade Balance release print in the green at 15.97B, up 5.27, from expectations of 10.70B and a previous of 13.25B, while our over in China the Unemployment Rate printed unchanged at 2.2%, followed by Foreign Currency Reserves at 850B opposed to a previous of 925B. China is also currently contemplating a $220bn stimulus package with unprecedented bond sales. Relatively quiet for today on the our macroeconomic calendar until next week Tuesday Consumer and Business confidence releases.
USD
The Aussie sees an upside against the Greenback today as it once more firmly regains the .68 bracket erasing Wednesday’s losses, currently trading at 0.6838 at time of writing. Last night’s US weekly jobless claims were slightly worse than expected with initial claims up to 235k compared to forecasts of 230k while continuing claims rose to 1.375 mio against expectations of 1.325 mio. Trade Balance data also released with the May trade deficit slightly larger than expected by 0.5B, while Challenger Job Cuts y/y printed 58.8%. Through the night we saw the release of the Natural Gas Storage at 60B against expected 75B and previous of 82B, while Crude Oil inventories printed at 8.2M significantly higher than expected -1.6M and previous of -2.8M. At 3am FOMC Member Bullard hit the wires stating that possible rate cuts could follow once inflation moderates, followed by Member Waller came in a bit more aggressively announcing that they need to be firmer with rate hikes, as he believes the risks the FED must take will most likely cause some Economic damage. In Equities Wall St firmly in the green as the DOW JONES climbs a solid 1.1%, followed by the S&P 500 up 1.5% and the NASDAQ performing best gaining 2.3%, making it a strong day for equity markets. Looking ahead tonight we will see the most significant US Data of the week with the release of Non-Farm Employment Change, Unemployment Rates and Average Hourly Earnings m/m. For those eyeing the USD this would be one to keep an eye on, due out 10:30pm tonight.
EUR
The Aussie Dollar continues a firm ascent against the Euro as we climb into early June highs currently trading at 0.673 at time of writing amid justifiable Eurozone fears surrounding the possibility of Russian pipelines to the region being shut indefinitely, which would further exasperate the energy crisis primarily in Germany. European equities opened higher with the Eurostoxx 50 up 1.5%, CAC up 1.6% and the Dax performing best up 2.0%. Out of the Zone yesterday afternoon we saw German Industrial Production m/m .1 below expectations printing at 0.2%, while both Spanish and French 10y Bond auctions came in near par and finally ECB Monetary Policy Meeting Accounts released yet the meeting of 13-14 April is having less relevance on the market as the situation changes so rapidly. Looking forward today we will see the French Trade Balance and Italian Industrial Production m/m both expected to come in similar to last print. Also set tentatively for release today will be the EU Economic Forecasts which will give markets an idea on ECB strategies for the next 2 years. Finally the ECB’s President Lagarde hitting the wires at 9:55 in front of the Economic Meetings of Aix-en-Provence, in France to wrap up the day.
GBP
The Aussie trade sideways against the Pound Sterling in choppy conditions currently at 0.5693 at time of writing as the UK stabilizing amid the turbulent news of PM Johnson officially announcing his resignation. UK Prime minister Boris Johnson’s defiant words of yesterday have rung hollow as today he has announced he will be resigning once a new party leader is chosen. This following the move by the majority of the Tory party seeking his resignation amid a series of scandals. In UK Equities the FTSE finds itself in the green, gaining 1.1% a standard of today’s Bullish equities worldwide. The BOE hit the wires saying that UK firms expect wages to rise 5.1% in the next year, while they expect they will increase prices by 6.3%. In a BOE poll, 1-year CPI inflation expectations are at 7.4%, and 3-year 4.0%. UK’s Obr said UK public debt is on an unsustainable path long term, adding that tax raises or spending cuts are needed by Treasury. Light in terms of macroeconomic data for today with not much of market significance until next week Wednesdays GDP release followed by a slew of smaller prints.
NZD
The AUDNZD pair has risen firmly wiping the last two days losses off the board currently trading at 1.1082 at time of writing. Quite light on in terms of NZ market data for the day , as is the norm from across the ditch with nothing on the cards until next week Tuesdays’ Visitor Arrivals m/m and RBNZ Statement of Intent, but the bigger ticket Item will of course be the RBNZ Rate Statement on Wednesday with markets expecting a hike of 50bps akin to our own last Tuesday.