AUD Regains Losses As Global Tensions Ease
AUD
The Aussie Dollar opens the day higher across the board, seeing easing tensions from US-China trade negotiations. Asian equities closed mixed, with the ASX down 0.2% and the SHANGHAI COMP up 0.7%. Commodities shared a similar fate, seeing Oil down 0.6%, Gas down 1.5%, Gold up 0.6%, Silver down 0.8%, Iron Ore down 0.1% and Copper up 0.1%. Aussie Flash Manufacturing PMI came under the previous 51.4 at 49.7, and Services grew to 53.1 from 52.4. This continues with the global trend of the West, where manufacturing is slowing but services are increasingly becoming a larger part of the economic makeup. Tonight she will be at an economic dinner, where her comments could colour the outlook of the next rate decision we have next month.
USD
The AUDUSD opens the week higher, gapping up this morning to a 2-week high, opening this morning at a rate of 0.6539. Wall Street finished the week up strong, with the DOW JONES up 1%, S&P 500 up 0.8% and NASDAQ up 1.1%. US inflation figures on Friday night were slightly softer than expected, with CPY y/y coming in at 3%, expected to rise to 3.1% from 2.9%. Core CPI m/m came under at 0.2% from the previous 0.3%, and CPI m/m read 0.3%, expected to remain at 0.4%. Despite the softer readings, it was not enough to change expectations for two more Fed rate cuts this year, including one later this week. Flash Manufacturing and Services PMI’s came out largely as expected, still showing strong growth for October. There is no data out from the US today, with Thursday’s Rate announcement being the key piece this week. Although it seems certain of a 25bps cut, their following statement should illuminate their view heading into 2026.
EUR
The AUDEUR opens the day higher, gapping up this morning to get to a 2-week high, opening this morning at 0.5623. The European equities were slow into the close last week, with the DAX finishing up 0.1% and the CAC was flat. Friday saw the release of PMI data from the Eurozone. French PMI’s came in contractionary with their manufacturing as expected and their services slowed even further. German PMI's gap continues to widen, with their manufacturing remaining unchanged as contractionary, and their services coming in above expectations with even more growth. Manufacturing and Services both were expansionary for the Eurozone, with manufacturing at 50, and services coming in higher at 52.6. This shows a larger trend of weak manufacturing in Europe and - with new tariffs from China looming - it could push their manufacturing further down. Looking forward German IFO Business Climate is set to be released tonight, expected to raise from 87.7 to 88.1.
GBP
The AUDGBP pushed higher over the weekend, reclaiming the 0.49 barrier this morning, opening at 2-week high of 0.4909. British equities finished in the green, with the FTSE finishing up 0.7%. Friday saw PMIs out, with manufacturing coming in much higher than expected at 49.6 from 46.2, but still unable to be expansionary at 50. Services came in largely as expected at 51.1, previously at 50.8. Tonight will be their CBI Realised Sales, expected to go from -29 to -28.
NZD
The AUDNZD opens the day higher, wit the pair slowly grinding higher over Friday, opening this morning at a rate of 1.1341. There was no news out from the Kiwis and nothing today.