AUD Climbs Ahead of Trump Address on Iran War
AUD
The Aussie Dollar rises against the majors this morning as US President Donald Trump indicates that he plans to end the conflict in the Middle East within the next two to three weeks, even if a formal agreement with Tehran remains uncertain. These remarks supported risk assets globally and weighed on the US Dollar. Asian equites followed Wall Street’s lead to bounce off Wednesday’s lows led by the KOSPI +8.4%, the Nikkei, +5.2%, and the Hang Seng +2.0%. The ASX climbed +2.2% over the session with materials and IT leading the way. Yesterday, Commodity Price y/y surged 12.8% YoY in March, up a 4.9% gain last month, which was the strongest increase since January 2023. However, manufacturing activity in China slowed as the RatingDog Manufacturing PMI fell to 50.8 in March from 52.1 in February, which missed the market forecast. Later this morning the Australian Goods Trade Balance is set to release and is currently forecasted at 2.81B, previously at 2.63B. Nothing major upcoming data wise for the Aussie with a long weekend ahead to celebrate Easter.
USD
AUDUSD continues its recovery, opening at 0.6924 this morning amid growing signs of a possible ceasefire in the Middle East conflict. Expectations that a ceasefire could be near have reversed some of the gains the USD has made as a safe-haven asset. Another strong session on Wall St. saw the Nasdaq trading +1.1%, the S&P 500 +.7%, and the Dow Jones +.5%. U.S.10-year yields were steady at 4.31%, while Brent Crude fell 2.5% to $101.50 a barrel. At 12:00PM AEST today, Trump is scheduled to address the nation "to provide an important update on Iran" which markets will closely be paying attention to for any indications of plans to wrap up the war. Some US data out last night which was mostly positive but fails to provide any boost to the US Dollar. The ISM Manufacturing PMI rose to 52.7 in March, above expectations, while Retail Sales increased by 0.6% MoM in February, marking their strongest gain in seven months. Meanwhile, the ADP Employment Change report showed that the private sector added 62K jobs in March, beating forecasts but slightly below the previous revised reading. Later tonight US Unemployment Claims and Trade Balance are set for release.
EUR
AUDEUR opens flat at 0.5976 after mostly trading sideways this week as the pair awaits any sign of the Middle Eastern conflict winding down. European equities closed in the green with the DAX and CAC coming in at +2.7% and +2.1% respectively. Some data out of Europe yesterday with the Unemployment Rate increasing to 6.2% from 6.1% and Final Manufacturing PMI mostly meeting the forecast of 51.4 coming in at 51.6. Rest of the week is quiet for the Euro with geopolitical headlines likely to be the big market mover ahead of the long weekend.
GBP
AUDGBP opens slightly down at 0.5203 as the Bank of England (BoE) signaled the possibility of a rate hike as early as April amid inflation risks linked to Middle East tensions. UK Equities also closed in the green, coming in at 1.9%. UK markets will be closing early ahead of Good Friday, which means Sterling liquidity will thin out significantly through the Thursday afternoon session. That reduced liquidity could amplify moves if Trump's midday address delivers any surprises that the market needs to digest.
NZD
AUDNZD opens up at 1.2033 and maintains its 1.2 handle overnight. The RBNZ's next meeting is on April 8 and is considered certain to hold steady while citing the uncertainty caused by the war. A move in May is now implied at 25%, down from 60% at the end of last week, while July is at 68% from being almost fully priced.