Strong US Employment Report Supports Greenback
AUD
The Aussie dollar sees marginal losses across the board with no major local data to digest and mixed commodity prices, with Gold up 1.5%, Silver up 1.8%, Iron Ore down 1.1% and Copper down 0.2%. Asian Equities where red into Friday's close, with the ASX closing down 0.6% and the Shanghai Comp down 0.2%. To the news, Goods Trade Balance came out on Friday lower at 7.28B, expected at 10.50B from a previous 10.06B and markets were unmoved. There is no news to be released today, with the week's focus locally being China’s CPI y/y and PPI y/y being released on Thursday, with both looking to decrease from 0.7% to 0.4% and -2.7% to -2.8% respectively. However there's plenty of offshore data due this week to keep markets moving(see below).
USD
The AUDUSD opens lower this morning after a volatile weekend, with the pair whipsawing off the back of the positive US employment report, opening this morning slightly lower at 0.6569. Looking at the composite details of the US employment data, Average Hourly Earnings m/m came in line with expectations, however the Non-Farm Employment Change added an impressive 303k new jobs (vs expectations of 212k an up from a previous 270k) and the Unemployment Rate came in lower at 3.8%, with forecasts of no change at 3.9%. This data shows the US employment is in a very strong place, with nearly an extra 100k jobs more than expected and a lower unemployment rate, showing a very resilient jobs sector, giving room for the Fed to hold rates higher for longer if needed, also providing support to the Greenback. Wall Street rallied off the back of this news, with the Dow Jones up 0.8%, the S&P 500 up 1.1% and the NASDAQ up 1.2%. Looking forward, there is no relevant data being released today, with this Wednesday being the Focus with their inflation data to be released; with both Core CPI m/m and CPI m/m expected to decrease from 0.4% to 0.3%; with CPI y/y expected to increase to 3.4% from 3.2%.
EUR
The AUDEUR trailed off into the weekend, losing small gains made on Friday, opening this morning at 0.6066. The European Equities closed in the red, with the DAX down 1.2% and the CAC down 1.1%. On Friday Retail Sales m/m where released, coming in lower at -0.5%, expected at -0.3% form a 0.0%. Today German Industrial Production m/m is coming out, expected to decrease from 1% to 0.6%. Focus will be on Thursday night's ECB rate decision with the Main Refinancing Rate expected to remain unchanged at 4.50%.
GBP
The AUDGBP sees a small loss over the weekend, still managing to hold onto the 0.52 barrier, opening this morning at 0.5204. The British Equities took a hit over the weekend, with the FTSE closing down 0.8%. To the news Construction PMI came out on Friday, higher than expected at 50.2, with expectations at 49.8 from a previous 49.7, being the first time in 7 months this figure has been expansionary. Looking forward, tonight we have MPC Member Breeden Speaking around monetary policy in Zurich, with all eyes on this Friday's GDP m/m figure, expected to decrease from 0.2% to 0.1%.
NZD
The AUDNZD grinded slightly higher over the weekend, managing to hold on to its recent gains, opening this morning at 1.0939. There was no news on Friday or today, with the major upcoming news being this Wednesday’s release of NZ's official Cash Rate, following with the RBNZ Rate Statement; with forecasted expecting it will remain unchanged at 5.50%. Some pundits see an outside chance of the easing cycle to start on Wednesday with a 25bps rate cut.