US Data Impresses, AUD Off the Boil

AUD

AUD opens down against USD and largely flat against most of the majors this morning on the back of some stronger than expected US data overnight. Asian equities ended the session mixed, Nikkei +0.3%, Shenzhen +0.6% and Hang Seng -0.3%. The ASX 200 finished modestly higher +0.1% as energy and materials carried the index, +1.9% and +1.6%. Overnight risk appetite tightened a little as headlines hit the wires that the US had deployed jets against Russian aircraft after they had been detected in the Alaska air zone. Comments later in the session suggested that European countries had informed Russia privately that they were ready to down Russian aircraft in the event of any incursion into their territory. All eyes now turn to next Tuesday with the RBA Rate Decision, which is fully expected to hold. Following Wednesday's steeper than expected local inflation data, the pace of further expected cuts has slowed with the next 25bps rate cut not fully priced in until March next year.

USD

AUDUSD opens down at 0.6541, now back at 3 week lows after posting fresh yearly high just a week ago. The US posted a series of positive results overnight which strengthened the Greenback significantly. Final GDP q/q surpassed it’s 3.3% forecast coming in at an impressive 3.8% caused by an uptick in consumer spending. The other impressive data of note was Unemployment Claims which came in at 15k less than the forecasted 218k. Wall Street continued its down week with the Dow -0.4% and both the Nasdaq and S&P 500 -0.5%. Looking ahead, US will be looking to extend this run of positive results as the Core PCE Price Index m/m is coming out later tonight, expectations sit at 0.2% for the month.
 

EUR

AUDEUR opened flat at 0.5606, reaching highs of 0.5623 early last evening. The DAX and CAC were down at -0.6% and -0.4% respectively. Yesterday only minor data released from the Eurozone with Private Loans y/y at 2.5% and the ECB Economic Bulletin revealed inflation expectations for the future. The ECB sees headline inflation averaging 2.1% in 2025, 1.7% in 2026 and 1.9% in 2027. Next week for Euro data will see a series of CPI, PMI and PPI results spread throughout the week.
 

GBP

AUDGBP opens flat at 0.4901, having traded a very tight range of 0.4893/0.4908 overnight. The FTSE closed down -0.4%. CBI Realized Sales fell for the 12th month in a row at -29 indicating the purse strings continue to be tightened in the UK. Another quiet week for data next week, one thing to note will be Gov Bailey speaking on Friday at the Knott Farewell Symposium.

NZD

AUDNZD opens up at 1.1339, continuing to distance itself from its neighbour. Next week we have ANZ Business Confidence on Tuesday and Building Consents m/m on Wednesday.