Aussie Employment Data Presses 15-Month Highs
AUD
The Aussie Dollar staunches higher against the majors, fueled by surprise low unemployment figures; firming the rate hike potential with the RBA. Asian Equities saw solid gains, with the ASX up 0.7% and the SHANGHAI COMP up 0.1%. Australia’s unemployment rate unexpectedly dropped from 4.3% to 4.1% in December, and Employment Change rose to 65.2k, expected at 28.3k from -28.7k. Economists state that it was almost entirely driven by a sharp drop in the volatile youth unemployment rate. This tight labour market presses the RBA to the upside, raising potential chances of a RBA hike in the near future. This morning saw the release of the Flash manufacturing PMI as well, increasing to 52.4 from 51.6 and the Flash Services PMI upped to 56 from a 51.1; the last data point for the week.
USD
AUDUSD saw a huge jump in the past 24 hours, gaining nearly a cent and pressing a 15-month high, opening this morning at a rate of 0.6841. US stocks and bonds firmed overnight after a softening of Donald Trump’s rhetoric over Greenland, with the DOW JONES up 0.9%, S&P 500 up 0.8% and the NASDAQ up 1.1%. US had a slew of data, with Unemployment Claims coming under at 200k (expected to rise to 209k from 199k). Final GDP q/q rose to 4.4% (expected to remain at 4.3%) and Final GDP Price index q/q as expected, remained at 3.8%. November Core PCE Price Index m/m came in as expected at 0.2%. These are all very positive economic results from the US, showing strong growth even with the potential short-term economic anchor of tariffs.
EUR
The AUDEUR pushes to 10 month highs, breaking through the 0.58 barrier yesterday, opening this morning at a rate of 0.5818. European equities saw a strong gain, with the DAX up 1.2% and the CAC was up 1.0%. It was a quiet day for the Europeans, with tonight being their first major data release of the year. They have PMI’s to be released out of Germany and France, looking to stay inline with the previous reading, weakening French manufacturing and general growth in Services.
GBP
The AUDGBP kept the trend going, seeing strong gains, pushing into 11-month highs, opening this morning at a rate of 0.5067. British equities were soft into the close, with the FTSE closing up 0.1%. last night saw the CBI Realized Sales, coming in at -17, expected at -35 from -44. Tonight will see Retail Sales m/m, expected to come in at 0% from -0.1%. Their PMI’s are set to be released as well, with the Flash Manufacturing expected to remain at 50.6, and Services to increase to 51.7 from 51.4.
NZD
The AUDNZD saw a slump yesterday, loosing small gains, opening this morning at a rate of 1.1551. This morning saw the release of their CPI q/q reading 0.6%, expected to drop to 0.5% from 1%. Although it was a sizable drop, it is still more than expected, which is trickly with the poor economic performance their economy has been seeing, giving rate cuts added weight.