US-China Tariff Talks in Focus

AUD

The Aussie Dollar opens marginally higher against the majors, supported by optimism over the resumption of US-China trade talks. A new round of talks aimed at resolving the trade war between the US and China has started in central London. China's exports of rare earth metals, which are crucial for modern technology, as well as Beijing's access to US products, are expected to be high on the agenda. Yesterday's inflation data from China showed consumer prices fell for a fourth consecutive month in May (-0.1%), deepening deflation worries as demand stays weak. Deflation in China's factory-gate / producer prices also deepened, clocking the steepest decline since July 2023 (-3.3%). Commodities were mixed yesterday: Gold -0.4%, Silver +0.3% and SGX Iron Ore -0.6%. The ASX was closed yesterday. It traded -0.3% on Friday as technology and healthcare led losses. An exceptionally quiet week ahead in terms of domestic data, featuring consumer and business confidence surveys today. Futures markets are discounting about an 80% chance of a 25bps cut at the RBA July meeting, up from about a 2/3 chance at the end of last week and the previous week. 
 

USD

AUDUSD touched near-7-month highs of 0.6533 yesterday before retreating a tad to open at 0.6516. The slip in the USD came after optimism over a better-than-expected US employment report was offset by caution ahead of pivotal US-China trade talks today (the AUD benefited from news of these talks). Friday evening's US jobs report showed surprisingly firm employment growth (139k in May) and stable unemployment (4.2%), but risks are skewed toward more weakness in coming months as trade uncertainty and concerns for consumer spending lead firms to become much more cautious on hiring. A quiet start to the week saw minor gains on Wall St. with the Nasdaq closing +0.3%. the S&P 500 +0.2% and the Dow Jones +0.1%. Quiet on the US data front over the next 24h. President Trump will be speaking tomorrow morning at the 250th anniversary of the United Stated Army, in Fort Bragg. US consumer inflation figures are expected tomorrow night.
 

EUR

AUDEUR opens at 0.5704, touching 0.5716 highs in yesterday's session. The DAX and CAC ended yesterday -0.5% and -0.2%. Tonight, we'll see Italian Industrial Production and Sentix Investor Confidence. Overall, a very quiet week for Eurozone data.
 

GBP

AUDGBP furthers steady gains seen since late May, touching 0.4815 highs yesterday before opening today at 0.4808. The FTSE traded -0.1% yesterday. This afternoon, the UK jobs report is expected to show 4.6% unemployment (up 0.1%), steady earnings growth (5.5%) and 9.5k unemployment-related benefit claims in May (up from 5.2k in April).
 

NZD

AUDNZD opens flat at 1.0773, trading a 0.45% range since Friday morning, touching 1.0801 highs yesterday. Another quiet week for the Kiwis. Yesterday, quarterly Manufacturing Sales data showed a 5.1% uptick. Visitor Arrivals figures will be posted tomorrow. On Friday, we'll see the BusinessNZ Manufacturing Index.