RBA Minutes Drive AUD Lower
AUD
The AUD opens mixed against the majors, having weakened yesterday in the aftermath of the the RBA's Meeting Minutes release. Asian equities closed higher yesterday, with the ASX +0.6%, Shanghai Comp +0.4% and Nikkei -0.1%. Commodities followed suit; the highest performers were Nat Gas +2.5%, Iron Ore +1.3% and Oil +1.3%. The RBA's Monetary Policy Meeting Minutes were released at 11:30am yesterday, with the AUD suffering in the aftermath, showing that a 50bps cut was seriously considered as a form of 'insurance' against a slowing economy in the face of global trade uncertainties. Ultimately, the central bank decided to cut the Cash Rate by 25bps to 3.85%. 70% odds are currently priced in for another 25bps cut at the July meeting. The next economic data piece is Australian GDP at 11:30am today, with current expectations of 0.4% in the quarter and 1.5% from a year earlier. Weak public demand, soft export growth and a fall in business investment are expected to be among the factors putting a brake on growth. A weak GDP print with further strengthen arguments for another RBA cut in July. After that, no more critical economic data expected to be released this week.
USD
The AUDUSD opens at 0.6463, reaching highs of 0.6500 yesterday before falling to current levels. Overnight we saw US JOLTS Job Openings release at 7.39M (above expectations of 7.11M). This continues the restricting job market from America since 2022. Wall Street closed slightly higher, seeing the Nasdaq close +0.7%, the S&P 500 +0.6%, and the Dow Jones +0.1%. Tonight will see ADP Non-Farm Employment Change (exp. 111K) and ISM Services PMI (exp. 52.0). The next data piece out of America after tonight will be more employment data on Friday night.
EUR
The AUDEUR opens flat at 0.5678, trading between 0.5647 and 0.5687 yesterday. On equities, the DAX and CAC closed +0.7% and +0.3% respectively. Yesterday had European inflation data release lower than expected, with the Core CPI Flash Estimate y/y (2.3% vs. 2.4%) and CPI Flash Estimate y/y (1.9% vs. 2.0%). Tomorrow night will have the European Main Refinancing Rate, with current expectations being that the ECB cut interest rates by 25 basis points again to 2.15%. The accompanying press conference will also provide key insights into their future monetary policy.
GBP
The AUDGBP opens at 0.4777, trading between 0.4795 and 0.4770 yesterday. The main data piece yesterday was the Monetary Policy Report Hearings, which showed that the board Members were happy with England’s progress on inflation. The FTSE also closed +0.1%. Tomorrow night will have Construction PMI at 6:30pm (exp. 47.4). This would be an improvement from the previous reading and would further promising signs of recovery from the English economy.
NZD
The AUDNZD opens at 1.0766, trading between 1.0782 and 1.0728 yesterday. Overnight, the fortnightly GDT Price Index printed at -1.6%. The next economic news piece will be ANZ Commodity Prices m/m tomorrow at 11am.