Looming Tariff Deadline Weighs On AUD
AUD
The Aussie Dollar has fallen against major currencies, as the pending tariff deadline for American reciprocal tariffs on July 9 causes an increase in market uncertainty. Commodities also fell across the board, with the largest movers being Nat Gas -3.1%, Silver -1.8%, Silver -1.8% and Gold -1.6%. Asian equities followed suit, as the ASX closed -0.4%, Shanghai Comp -0.7% and Nikkei +1.4%. No major economic news was released over the weekend; however, Chinese Manufacturing and Non-Manufacturing PMIs will be released at 11:30am today (exp. 49.6 and 50.3 respectively). The next economic piece to look for is Aussie Retail Sales m/m at 11:30am on Wednesday.
USD
The AUDUSD pair opens slightly lower at 0.6534, as a mix of American economic data and trade fears mostly balanced over the weekend. Treasury Secretary Bessent mentioned that trade talks “probably won’t be done” by Trump’s July 9 deadline, spurring fears that Trump could revert back to the April 2 reciprocal tariff levels. Additionally, American monthly Core PCE data released higher than expectations (0.2% vs. 0.1%). The yearly figure rose to 2.3%, up from last month's 2.2%. Markets currently expect an 18% chance of a July Fed rate cut, while pricing in 70% odds of a cut in September. Revised UoM Consumer Sentiment (60.7 vs 60.4). Wall Street closed slightly higher with Dow Jones +1.0%, S&P500 at +0.5% and Nasdaq +0.5%. No major economic data pieces are expected until Tuesday night, with the ISM Manufacturing PMIs, JOLTS Job Openings and Fed Chair Powell speaking at the ECB Forum.
EUR
The AUDEUR opens lower at 0.5569, as the Euro strengthened off USD and AUD weakness due to trade fears. On equities, the DAX and CAC rose sharply at 1.6% and 1.8% respectively. Spanish Flash CPI y/y released higher than expected on Friday at 2.2% vs 2.0%, slightly reducing the chances of future interest rate cuts from the ECB. Today will have German Prelim CPI m/m at 4:30pm, with current expectations of 0.2%. ECB President Lagarde will be speaking overnight. Tomorrow night will have Eurozone inflation data.
GBP
The AUDGBP opens a tad lower at 0.4761, as the Pound strengthened off USD and AUD weakness due to trade fears. The FTSE ended Friday +0.7%. Last week was very quiet for UK economic data, however, tomorrow night will have Bank of England Gov Bailey speaking on policy at the ECB Forum. The UK are one of the few countries finalizing a trade deal with the US regarding their tariffs, with the framework expected to be released by the July 9 deadline. No other major economic news this week.
NZD
The AUDNZD pair opens lower at 1.0772, as markets expect future risk to be weighted more towards Australia rather than New Zealand. Today’s economic data piece is the ANZ Business Confidence at 11am, which previously released at 9-month lows of 36.6. Tomorrow will have NZIER Business Confidence and Building Consents m/m.