AUD Soars on Increased RBA Rate Hike Chance
AUD
AUD surges overnight, opening in the green across the board off the back of increased RBA rate hike odds and Middle Eastern conflict uncertainty persisting. Asian equites finished stronger with the Nikkei +2.8%, Hang Seng +2.2% and the Shenzhen +1.3%. Locally the ASX 200 closed +1.1% as technology and materials sectors led the pack at +2% and +1.9%. The Reserve Bank's deputy governor Andrew Hauser spoke on the 'Politics with Michelle Grattan' podcast last night and was asked if the Middle East conflict would make an imminent rate hike more likely. He noted that he thinks there will be a very genuine debate, which has increased the probability of a rate increase next week. Yesterday and for the week remaining the Aussie have no scheduled currency impacting data out until Tuesday’s Cash Rate Decision. M2 Money Supply y/y and New Loans out of China today, with a quiet rest of the week to follow.
USD
AUDUSD surges to fresh highs overnight, briefly touching 0.7170 before opening at 0.7120, with the US-Iran tensions still playing the major role for global currency volatility. A steady session on Wall St. saw the Dow Jones trading +.3%, the Nasdaq +.2%, and the S&P 500 +.1% entering the final hour of the North American session. U.S.10-year yields rose 4bps to 4.14%, while Brent Crude fell 7% to $91 a barrel. US Defense Secretary Pete Hegseth said the US is hitting Iran with the "most intense" day of strikes since the war began which is conflicting President Trump's previous statement that the was was "very complete", which has caused some uncertainty surrounding how long this conflict will play out for. Some minor economic data out of the US yesterday with nothing major to note. Today we have US Core CPI m/m, CPI m/m & CPI y/y to be released which are forecasted at 0.2%, 0.3% and 2.4% respectively. Unemployment Claims tomorrow are forecasted at 214k, 1,000 more then last reading. Core PCE, Durable Goods Orders and GDP Price Index to finish a big week for the US data wise and conflict wise.
EUR
AUDEUR opens in the green at the best rate in over 12 months at 0.6130 this morning. European equities also closed in the green with the DAX up +2.4% and the CAC up +1.8%. Yesterday evening German & French trade balance data came out green at 21.2B and -1.8B respectively, along with ECOFIN Meetings held in Brussels. A few minor economic data points remain throughout the week, however, none of which set to affect currency much. All eyes on the Euro Cash Rate Decision next Friday.
GBP
AUDGBP opens back in the range of 13 month highs at 0.5304. the FTSE closed in the green up +1.6%. Yesterday and today are quiet for the GBP data wise. Tomorrow, BOE Gov Bailey is due to speak tomorrow evening at the Financial Stability Board Payments Summit in London and on Friday GDP m/m is set to increase from 0.1% to 0.2%.
NZD
AUDNZD opens at fresh 13 year highs at 1.1200. A quiet week for the NZD on the economic calendar, Manufacturing Sales q/q out tomorrow and Visitor Arrivals m/m out Friday to close the week.