Q1 CPI to Guide RBA Decision

AUD

The AUD opens lower against the major currencies, dragged by poor commodity performance and concerns of a lack of progress in US-China trade. Asian equities closed slightly up yesterday, with the ASX +0.9%, Shanghai Comp -0.1% and Nikkei +0.4%. Commodities were inversed; falling yesterday with the largest movers being Crude Oil -2.9%, Nat Gas -2.1% and Sugar -1.7%. Today will have Australia's quarterly CPI data, the RBA's preferred inflation gauge, expecting an increase of 0.8% this quarter and 2.3% for the year. China will also have their PMIs released, with expectations being a slight drop from last month. Markets are currently expecting either a 25 or 50 basis point cut from the next RBA meeting, so this inflation reading will heavily influence the RBA’s decision on May 20. Tomorrow will also be a bank holiday for China (Labour Day).
 

USD

The AUDUSD opens lower at 0.6383, falling from 2025 highs of 0.6449 yesterday before settling to current levels overnight. Recently, AUDUSD has recovered a little due to greater prospect of tariff deals, with U.S. Treasury Secretary Scott Bessent mentioned negotiations with India and South Korea. Wall Street followed suit, as Dow Jones closed +0.7%, S&P 500 +0.6% and Nasdaq +0.5%. Yesterday had JOLTS Job Openings release at 7.19M, lower than expectations of 7.49M. Additionally, CB Consumer Confidence released lower at 86.0 (exp. 87.7) which signaled a 13.5 year low. Tonight will have employment and inflation data, with Advance GDP q/q (exp. +0.2%), Employment Cost Index q/q (exp.+0.9%) and Core PCE Price Index m/m (exp +0.1%).
 

EUR

The AUDEUR opens lower at 0.5606, falling from highs of 0.5649 yesterday. European equities were closed slightly higher, with DAX +0.1% and CAC +0.5%. Yesterday saw Spanish Flash CPI y/y release higher than expectations at 2.2% vs 2.0%. Today will see German Prelim CPI m/m (exp. +0.4%). Tomorrow is a bank holiday for Europe (May Day).
 

GBP

The AUDGBP opens lower at 0.4761, dropping from yesterday’s highs of 0.4799 before settling to current levels. On equities, the FTSE closed flat. No news out of England yesterday, continuing a relatively quiet week economically. Today will have minor English housing data released at 4pm and the Final Manufacturing PMI releasing tomorrow night.
 

NZD

The AUDNZD opens lower at 1.0753, trading between 1.0745 and 1.0785 yesterday. Later this morning will have ANZ Business Confidence, which has been improving for the past year. Nothing else out for the rest of the week.