AUD Flat Ahead of Domestic Inflation Report
AUD
The AUD trades mostly sideways overnight, opening flat against the majors after Australia’s business activity growth softened at the end of the third quarter, according to the latest flash PMI data. Business optimism also fell to the lowest level in a year. Asian equities had a mixed session, Nikkei +1%, Shenzhen -0.1%, and Hang Seng -0.9%. The ASX 200 closed +0.4% as financials and materials led gains. Commodities closed mostly in the green with Gold +0.5%, Silver and Iron Ore both flat, and Copper +0.2%. Looking at local news, we will get the CPI y/y release later this morning at 11:30am with forecasts pointing to a slight increase year-on-year to 2.9%. While the RBA will take the monthly CPI into consideration at its 30th September meeting, it has indicated a preference to wait for quarterly CPI releases to assess inflation trends (Q3 CPI out 29-Oct). As a result, it is unlikely that the August CPI will move enough to prompt an RBA policy change in September.
USD
AUD/USD opens flat this morning at 0.6599 after the US Manufacturing PMI for September printed at 52.0 (52.2 exp) while Services PMI was 53.9 (54.0 exp). This saw the Composite PMI fall to 53.6 (54.0 exp). The data shows U.S. business activity growth slowed for a second straight month, accompanied by a softening of demand growth. Released shortly afterwards, the Richmond Fed Manufacturing Index for September fell to -17 from -7, weaker than forecasts of -5. Fed Chair Powell also spoke earlier this morning saying that price increases largely reflected tariffs though there remained considerable uncertainty over the path of inflation. He also noted that downside risks to employment had risen and the conflicting risks for both sides of the dual mandate needed different answers. Wall Street also closed lower with the Nasdaq -0.9%, S&P 500 -0.6% and the Dow -0.2%. Looking at US releases later this morning President Trump will be speaking at The United Nations Leaders' Reception, in New York, then overnight we will get New Home Sales which is forecasted to fall from 652K to 650K.
EUR
AUD/EUR opens flat at 0.5585 after business activity was shown to rise in the Eurozone during September, according to provisional PMI survey data, continuing the trend seen since the start of 2025. That said, new orders failed to maintain the growth seen in August and were unchanged over the month. Employment was also kept unchanged as business confidence dipped to a four-month low. Meanwhile, inflationary pressures softened, with both input costs and output prices increasing at weaker rates at the end of the third quarter. Eurozone equities closed in the green with the DAX +0.4%, and the CAC +0.5%. Looking ahead at Eurozone data, German ifo Business Climate is set for release later this evening at 6pm.
GBP
AUD/GBP opens flat at 0.4879 after S&P Global Flash UK PMIs showed the UK private sector output expanded for the fifth month running in September, but the rate of growth was only modest and eased to its lowest since May. Looking at UK equities, the FTSE remained flat into the close. Nothing major set for release today out of the UK, however, overnight MPC Member Greene will be speaking about supply shocks and monetary policy at the Adam Smith Business School, in Glasgow.
NZD
AUD/NZD opens higher this morning at 1.1266 bouncing back after the announcement on the Reserve Bank of New Zealand who are expected to set a new Chief. No further data set for release from our Kiwi neighbours until next week.