Markets Steady Ahead of Economic Data Dump

AUD

The Aussie Dollar opens the day mixed against the majors, as markets turn their attention towards the US Federal Reserve's interest rate decision early tomorrow morning, as well as a range of other heavy-hitting data over the next 24 hours, including Australian quarterly consumer inflation later this morning. Commodities had a strong day, with Crude Oil climbing 4%, Nat Gas closing up 3.7%, Gold and Silver up 0.1%, Iron Ore up 1.1% and Copper up 0.9%. Asian equities were softer into the close, with the ASX closing up 0.1% and the SHANGHAI COMP closing up 0.3%. There was no domestic data released yesterday, with the Q2 CPI to be released at 11:30am today. Both the CPI y/y and Trimmed Mean CPI q/q are expected to remain at 2.1% and 0.7% respectively, with the CPI q/q expected to drop to 0.8% from 0.9%. These results will be closely watched for signals of whether the Reserve Bank of Australia is likely to cut rates in August, with the last meeting resulting in a surprise hold. Markets widely expect a 25bps cut from the RBA in two weeks, although a large downside miss in today's inflation prints could lean the RBA towards an even bigger cut.
 

USD

AUD/USD starts the day flat, with the pair peeking below the 0.65 barrier overnight, opening this morning at a rate of 0.6513. Wall Street saw a softening into the close, with the DOW JONES closing down 0.5%, S&P 500 down 0.3% and the NASDAQ down 0.4%. U.S. Consumer Confidence for July printed at 97.2, up from a positively revised 95.2 and better than expectations of 95.2. June JOLTS Job Openings fell to 7.44m to print lower than forecast of 7.51m, even lower than the previous 7.71m, this small miss didn’t affect the rate. Tonight, we will see a slew of data out from the US, starting with Advance GDP q/q growth. The forecasts are of 2.5%, this would represent a rebound from the contraction that occurred in Q1 of -0.5%. Advance GDP Price Index q/q is looking to soften from 3.8% to 2.2% and ADP Non-Farm Employment Change is expecting a 110k rise from -33k last reading. The main event will be the Federal Funds Rate, with expectations nearly certain of a hold at 4.50%. Future’s markets are currently pricing in a 63.7% chance of a 25bps cut in the following meeting in mid-September, so the FOMC Statement and Press Conference tomorrow is likely to add weighting into which way they will be leaning for that meeting. The rate hold could also re-ignite tension between the Trump and J. Powell, where the President called into question the FOMC’s decision for holding, which could cause another sell-off of USD.
 

EUR

The AUD/EUR sees a rise to open this morning at a rate of 0.5632. European equities had a strong finish to the day, with the DAX finishing up 1%, and the CAC closing up 0.7%. Yesterday saw the Spanish Flash GDP q/q rose to 0.7%, with expectations of unchanging at 0.6%, and tonight will see Spanish Flash CPI y/y to be released, expected to remain at 2.3%. German Prelim GDP q/q is forecasted to show a contraction to -0.1% from 0.4% growth previously, Germany is the largest economy in the Eurozone, so further downturn there may encourage more liberal ECB rate cuts to push growth.
 

GBP

The AUDGBP has kept steady since yesterday, keeping in a tight range in the past 24 hours, opening this morning at a rate of 0.4877. BRC Shop Price Index y/y came in higher at 0.7%, expected to slow from 0.4% to 0.2%. There is no further data out for today and tomorrow, expect volatility in the rate to come from global changes.
 

NZD

The AUDNZD has been mildly grinding up since yesterday, with the pair just claiming a weekly high, opening this morning at 1.0939. There was no data out yesterday, with ANZ Business Confidence to drop at 11am today, previously at 46.3.