AUD Softens as Markets Digest US Data
AUD
The Aussie Dollar opens lower this morning against the major’s bar the NZD retracing back to where we were on Monday. A mixed day for Asian equities saw the Nikkei trade +3.1%, Hang Seng +0.9% and the Shenzhen -0.6%. Locally the ASX 200 climbed +0.6% as materials and financials led the pack with gains of +2% and +0.7% respectively. Commodities also closed mostly in the green with Gold flat, Silver +0.4%, Iron Ore +0.4%, while Copper -0.4%. Looking at local data there is nothing set for release today, however China may be releasing their Trade Balance, and the USD-Denominated Trade Balance as it has been set as tentative. Our next local release will be tomorrow with MI Inflation Expectations.
USD
AUDUSD opens lower this morning losing its 0.67 handle at 0.6682 after U.S. CPI for December printed at +0.3% MoM and +2.7% YoY, both matching expectations though the core measures were weaker than forecast by 0.1% with MoM at 0.2% and YoY at +2.6%. US New Home Sales also came through higher than forecast 737K. Wall St. ended the session lower with the Dow Jones trading -0.7%, the S&P 500 -0.4%, and the Nasdaq -0.4%. It will be another data heavy day out of the US with U.S. retail sales report for November scheduled for release tonight. The headline figure is expected to increase by +0.4% MoM, following a flat reading in October. U.S. PPI data for October and November, delayed by the government shutdown, will also be released. As an early inflation indicator, attention will focus on components tied to core PCE (portfolio management & investment advice, air travel). The Federal Reserve’s Beige Book, due early tomorrow morning, will provide insights into current economic conditions and business sentiment.
EUR
AUDEUR opens lower this morning at 0.5739 after what was a quiet day with only French Gov Budget Balance which didn’t affect markets. Eurozone equities also didn’t see much movement with the DAX +0.1%, and the CAC -0.1%. Nothing really of note this week for the Eurozone, we might get some minor data tonight with German 30-y Bond Auction however it is still set as tentative.
GBP
AUDGBP opens slightly lower this morning at 0.4978 despite BRC Retail Sales Monitor y/y coming through lower than forecast of 1.0% from 1.3%. UK equities also remained stagnant with the FTSE flat. Nothing really of note out of the UK today in terms of data, with only MPC Member Taylor Speaking later this evening at 7pm. All eyes will be focused on GDP m/m tomorrow, which is forecasted to show a slight increase from -0.1% to 0.1%.
NZD
AUDNZD opens slightly higher today at 1.1638 despite this morning’s NZD Building Consents m/m coming through higher than previous. Looking at our Kiwi neighbours today they will have some further news released with ANZ Commodity Prices m/m later this morning at 11am with nothing else set for release.