Strong Jobs Data Advances the Aussie Dollar
AUD
The Aussie Dollar opens the day up, despite increasing tension in the middle east, with a second carrier strike force being deployed, with strikes on Iran seeming more likely by the day. Asian equities were mixed into the close, with the ASX finishing up +0.9% and the SHANGHAI COMP down -1.3%. Australia’s Unemployment Rate remained at 4.1% for January, defying market expectations of an increase to 4.2%. The Employment Change Came under as well at 17.8k, expected to drop to 20k from 68.5k. This adds further flex allowing the RBA to do another hike. This morning saw our Flash PMI’s release softer, with the manufacturing drop to 51.5 from 52.3 and Services slow to 52.2 from 56.3.
USD
The AUDUSD opens the day slightly up, with the pair keeping in a tight range, opening this morning at a rate of 0.7060. Wall Street softens into the close, with the DOW JONES closing down -0.6%, S&P 500 down -0.5% and the NASDAQ down -0.4%. US unemployment Claims came in lower last night at 206k, expected at 223k. Philly Fed Manufacturing index came in higher at 16.3, expected at 7.5. US 4Q GDP is set to be released overnight. Growth is expected to moderate to 2.8% QoQ annualized rate, down from 4.3% in 3Q. The Atlanta Fed’s GDP Now model is currently pointing to a firmer result of 3.7%. The U.S. PCE index for December is also due out. Consensus expects both the headline and core measures to accelerate to 0.3% MoM (from 0.2% MoM previously), bringing the YoY rates to 2.8% and 2.9%, respectively. This report will help shape expectations around Fed’s near-term policy path.
EUR
AUDEUR opens in the green, strengthening 15 basis points to open at 0.5995, after the ripple effect of ECB President Lagarde announcing she will be stepping down, which could account for some of the Aussie upside. European equities closed in the red, with the DAX down -0.9% and the CAC -0.4%. Overnight was quiet in terms of currency impacting data. This evening, Eurozone, French and German PMIs are set to come in mixed compared to the last reading. Next week, eyes will be on President Lagarde’s speech on Tuesday morning.
GBP
The AUDGBP pushes into a new 16-month high, flirting with the 0.5250 barrier overnight, opening this morning at a rate of 0.5238. British equities finished in the red, with the FTSE closing down -0.6%. CBI Industrial Order Expectations came out last night as expected at -28, from -30. Tonight will see Retail Sales m/m, expected to soften to 0.2% from 0.4% and Flash Manufacturing PMI to slow to 51.5 from 51.8 and the Flash Services PMI to also soften, 53.5 from 54.
NZD
The AUDNZD sees a fresh 13 year high, pushing into the 1.18’s opening this morning at 1.1815. Later today will see RBNZ Gov Breman Speaking, with markets holding close attention to her words to see if they can build confidence after the recent comments admitting fault in their forecasting.