Aussie Dollar Surges as Trump Agrees to Ceasefire
AUD
AUD opens in the green across the majors after Trump announces a two-week ceasefire deal with Iran, after making threats last night to attack their energy infrastructure. In Asia, the Nikkei and Shenzhen indexes ended unchanged yesterday, while the ASX closed higher at +1.7% as technology and materials sectors outperformed at +4% and +2.6%. In terms of economic data we saw some minor economic data with ANZ Job Advertisements m/m and Household Spending m/m out mid-morning yesterday. Job postings saw a -3.1% decline after 2 months of positive growth which shows the labour market softening. The rest of Asia opened the week quiet and remains so until their PPI and CPI y/y expected at 1.2% and 0.4% this Friday.
USD
AUDUSD rallies heavily after the open coming in at 0.7025 off the back of Trumps proposed ceasefire which includes controlled passage through the Strait of Hormuz, a safe transit protocol and withdrawal of US combat forces from the Middle East. On Wall St. the Dow Jones closed-.2%, the Nasdaq +.1%, and the S&P 500 +.2%. U.S.10-year yields fell 3bps to 4.30%, while Brent Crude fell 2.5% to $107 a barrel. Overnight, US Core Durable and Durable goods m/m came in mixed at 0.8% and -1.4% respectively. Today, API Weekly Statistical Bulletin and FOMC Member Jefferson Speaks. All eyes on tomorrows Core PCE Price Index m/m, Final GDP q/q, Final GDP Price Index q/q and Unemployment Claims expected at 0.4%, 0.7%, 3.8% and 210K respectively.
EUR
AUDEUR surges this morning regaining the .60 handle to open at 0.6040. European equities closed in the red with the CAC -0.7% and DAX -1.1%. The economic calendar has been quiet so far with no major data outlined until Eurozone, German and French PMIs on the 23rd of April. ECB policymaker Dimitar Radev mentioned during an interview with Reuters that the European Central Bank must be ready to raise interest rates swiftly if signs of persistent price pressures emerge. Policymakers are now debating whether to tighten policy to prevent this increase from becoming embedded in the price of other goods and services, setting off a self-reinforcing price spiral.
GBP
AUDGBP opens in the green nearing the 53 handle at 0.5278. the FTSE also closed in the red at -0.8%. Similar to the Euro, the Sterling has no major scheduled economic data until the 16th when their GDP m/m is released. Much like the rest of central banks across the world, the BoE is also facing pressures to hike off the back of soaring inflation in the UK due to the inflationary risks of the energy crisis.
NZD
AUDNZD opens in the green at 1.2177 ahead of the RBNZ Cash Rate decision where they’re expected to hold rates at 2.25% despite soaring fuel prices. The RBNZ’s Monetary Policy Review and Governor Breman’s words will be closely scrutinized for policy guidance which may cause volatility in the NZD.