AUD Stabilizes Amid Supporting China Data, Trade tensions

AUD

The Aussie Dollar opens up against the majors, bouncing back from yesterday’s lows as US-China tensions were softened. Asian equities still struggled, as the ASX closed -0.8%, Shanghai Comp -0.2% and Nikkei -1.0%. Commodities followed suit except Copper (+4.6%), with largest movers being Sugar -3.0% and Natural Gas -2.5%. Chinese Trade Balance figures also released yesterday below expectations, hinting at an increase in future Chinese exports. Today will see Monetary Policy Meeting Minutes at 11:30am, providing context to the RBA’s rate decision on September 30. Additionally, Chinese New Loans continue to be delayed but may release today and tomorrow will see Chinese inflation figures at 12:30pm. A majority of the upcoming volatility would be a result of any potential updates on American and Chinese trade.
 

USD

The AUDUSD opens at 0.6518, improving from yesterday’s lows of 0.6472 as markets adjusted to changes in Chinese export policy. US President Trump curbed threats of retaliatory tariffs, as he downplayed his previous comments on across the board 100% tariffs on China. Wall Street rebounded as a result, with Dow Jones +1.2%, S&P 500 +1.4% and NASDAQ +2.1%. Yesterday saw minimal economic data releases due to Columbus Day, however tonight will have Fed Chair Powell speaking about monetary policy. Tomorrow night will see Empire State Manufacturing Index, expected to indicate slightly worsening conditions for American manufacturing.
 

EUR

The AUDEUR opens much higher at 0.5633, rebounding from yesterday’s lows of 0.5568 mainly from Aussie Dollar strength. German WPI m/m released as expected at 0.2% and equities closed higher with DAX +0.6% and CAC +0.2%. Tonight will have German ZEW Economic Sentiment, expected to show continued optimism in the German economy. No further European data is expected to be released this week.
 

GBP

The AUDGBP opens at 0.4888, improving over 1% from lows of 0.4845 to current levels due to improved US-China trade sentiment. MPC Member Greene spoke yesterday, mentioning his concerns over the British disinflation process slowing down. English equities closed marginally up, with the FTSE +0.2%. Today will see Average Earnings Index 3m/y (expected at 4.7%) and Claimant Count Change (expected at 10.3K). Tonight will have BOE Gov Bailey speaking at the Institute of International Finance, potentially hinting at monetary policy.
 

NZD

The AUDNZD opens at 1.1380, bouncing back from lows of 1.1314 as markets reconsidered tariff risks. No economic news from New Zealand released yesterday or today, with the next data piece being FPI m/m on Thursday 8:45am.