AUD Drops Further On Weak Employment Data

AUD

The AUD opened down across the majors, resulting from weaker than expected Aussie employment data. Employment rose by 14.9k and the Unemployment Rate released at 4.5% in September, both poorer than the market expectations. Asian equities ended the session with mixed results: the Nikkei +1.3%, Shenzhen +0.3%, while the Hang Seng slipped 0.1%. The ASX 200 closed +0.9%, driven by strong performances in healthcare and financials. There are no major data releases today, however employment is a crucial factor in the RBA's next rate decision; markets are now considering a likelihood of a November rate cut at around 80% (up from around 35% before the job’s report).

USD

AUD/USD is down at 0.6490, due to faltering risk sentiment and poor economic data. US equities finished firmly in the red, with the S&P 500 trading -0.8%, while both the Nasdaq and the Dow Jones were -0.6%.
Yesterday's Philly Fed manufacturing Index came in at -12.6, much worse than expected, and members of the US Federal Reserve have stated their plans to push for a interest rate cuts this year. Continued US government shutdown uncertainty and central bank signals will dictate dollar direction in the meantime.

EUR

AUD/EUR is down at 0.5550, as European markets cheered a political easing in France. European equities followed suit, with the CAC +1.4%, and the DAX +0.4%. No major data released today, but ECB President Lagarde is speaking in a panel discussion on Sunday. Markets will look for any clues regarding potential monetary policy changes.

GBP

AUDGBP is down 0.7% at 0.4828, with Aussie Dollar weakness driving the drop. UK GDP rose 0.1% in August as expected but was offset by a revised 0.1% decline in July (previously flat). On equities, the FTSE closed +0.1%. BoE policymaker Catherine Manne has warned that UK inflation could remain above the central banks target of 2%, urging cautions over further interest rate cuts. There is increasing speculation over whether the BoE will continue to cut interest rates.

NZD

The AUD/NZD is also down at 1.1329, NZ FPI m/m printed 0.4% (up from 0.3%). Monday will have CPI q/q, with markets watching with caution as the Kiwi economy is struggling.