US Data Makes AUD Go Bump in the Night

AUD

The AUD opens up in the green against the majors after seeing decent gains in the early hours of this morning. Asian equities closed yesterday in the red however, with the ASX at -1.3%, Shanghai Comp -0.2% and Nikkei at -1%. Yesterday we had the Caixin Services PMI out of China which came in just above expectations at 52.7 which didn't hold AUD back. No data out of China today with their bank holiday, and a quiet day for the Aussie with the only piece of data releasing will be the building approvals m/m which is not expected to impact the markets. In fact, the remainder of the week is devoid of local economic data so currencies will continue to receive influence in the overnight sessions, good conditions for overnight market orders.

USD

The AUDUSD opens at 0.6563, seeing a spike early this morning after FOMC member Bostic mentioned that a rate cut should be expected in the fourth quarter, weakening the USD and opening the door for AUD to gain almost a percent. Wall Street closed the session in the green with NASDAQ up 0.2%, S&P 500 up 0.1% and the Dow Jones closing flat. To the data, and the ADP Non-Farm Employment numbers came in above expectations at 184k vs 148k which was the only USD-positive data in what otherwise was a night of weak data from the US. FOMC Member Mester laid the groundwork for Bostic's aforementioned indication of imminent rate cuts, mentioning “Still Expects Fed Can Cut Rates Later This Year”. The ISM Services PMI data released shortly after, again disappointing the USD Bulls, printing at 51.4 with expectations at 52.8. The fun continues tonight, when we’ll see the US Unemployment Claims and more commentary from Fed Members (which seems to be the biggest currency influencers at the moment).

EUR

The AUDEUR opens at 0.6057, after seeing a spike in the late night and early morning session climbing up almost 0.4% and reaching highs of 0.6065. Equities closed the session in the green with the DAX up 0.5% and the CAC up 0.3%. A busy day for the EUR yesterday with a flurry of mid-tier data coming in short of expectations; Core CPI Flash Estimate which came in short of expectations at 2.9% from 3%, the CPI Flash estimate y/y which similarly came in short at 2.4% from expectations at 2.5%. Finally the EZ Unemployment Rate showed an increase from expectations at 6.4% to 6.5%. To the central bank guidance, and ECB member Brzeski mentioned ‘It looks a little bit as if inflation is really fading away”, which adds to the theme that rate cuts in Europe aren't far away. Tonight's data includes Spanish, Italian, French, German Final Services PMI which are all expected to remain at previous levels apart from the Italian & Spanish which are expected to slightly increase. Keep in mind the next ECB rate decision is now only a week away.

GBP

The AUDGBP opens up slightly in the green this morning at 0.5185 after seeing a large amount of volatility all throughout yesterday, reaching lows of 0.5169 and reaching highs of 0.5192 in the early morning session. The FTSE closed the night session flat with no data to influence market participants overnight. This evening we’re going to see the Building Approvals m/m and Final Services PMI which is expected to remain steady at 53.4. 

NZD

The AUDNZD opens slightly in the green at 1.0921, after reaching lows of 1.0902 yesterday then climbing up to highs of 1.0937 in the morning session. A quiet day for the NZ yesterday having only the GDT Price Index which came in above its previous result,  printing at 2.8% up from -2.8%. Just now we had the Building Consents m/m release which came in at 14.9%, a strong gain from previous levels of -8.6%. We’re expecting a quiet rest of the week for the NZ with no meaningful data until next Wednesday where we’ll see the NZD Official Cash Rate along with the RBNZ Statement.