AUD Slides as Chinese Stimulus Disappoints
AUD
The Aussie Dollar starts the week lower against all the majors after China's latest batch of inflation figures, as well as Beijing's most recent stimulus rollout, disappoint markets. Asian equities ended Friday mixed, with the NIKKEI +0.3%, SHANHAI COMP -0.5% and the ASX +0.8%. Commodities were mainly down with Iron Ore -1.1%, Copper -2.7%, Gold -0.9% and Silver -2.3%. China had their CPI figures come out on Saturday which came in at 0.3% year-on-year, below expectations of 0.4%. They also had their PPI figures which came in at -2.9%, also worse than -2.5% expectations. The consumer prices rose at the slowest pace in four months in October while producer price deflation deepened, even as Beijing doubled down on stimulus to support the sluggish economy. In its latest stimulus measures, the country's top legislative body approved a 10 trillion Yuan package to ease local government 'hidden debt' burdens, rather than directly injecting money into the economy, as many investors hoped to see. Locally, on Tuesday we have our Westpac Consumer Confidence Index and NAB Business Confidence.
USD
The AUDUSD pair opens lower at 0.6581, falling over 1.6% from Friday morning's highs as the AUD weakens in the aftermath of weak Chinese data. Wall Street closed Friday in the green, DOW JONES +0.6%, S&P 500 +0.4% and NASDAQ +0.1%. The Fed had their interest rate decision on Friday morning where they lowered the Federal Funds Rate by 25bps to 4.75%. The duck-and-weave tone of most of the Press Conference made it clear that the FOMC is on some awkward limbo as it waits to see how other macroeconomic policies could change in the wake of the US election. Another data-heavy week out of the US this week with the main events to look out for being the inflation rate on Thursday and then US PPI followed by Fed Chair Jerome Powell speaking on Friday.
EUR
The AUDEUR opens lower this morning at 0.6146. European equities closed Friday down, with CAC -1.2% and DAX -0.8%. No major new outs of the EURO on Friday, with just Italian Retail Sales MoM 1% higher than expected at 1.2%. ECB President Lagarde also spoke over the weekend, although steered clear of policy talk. Tomorrow, Europe's main economy Germany has their final Inflation Rate figures which are expected at 2%.
GBP
The AUDGBP pair opens up this morning at 0.5087 as the Bank of England signals a gradual rate-cut cycle. The FTSE ended the day down 0.8% on Friday. Tomorrow, Britain has their Unemployment rate figures coming out with expectations of 4.1% with the previous reading coming out at 4%.
NZD
The AUDNZD opens up lower at 1.1020 this morning. Very quiet last week for the NZD. Early this afternoon we'll see NZ Inflation Expectations q/q. There are a few low-tier releases later in the week as well. Futures markets are currently fully pricing in a further 50 bps cut when the RBNZ next meets on November 27, and have a small chance of a 75 bps cut.