AUD Trades Sideways as US-Iran Negotiations Progress
AUD
The Aussie Dollar starts the week flat against the majors following cautious optimism around headlines that an agreement with the US and Iran to end the war has been 'largely negotiated'. Although Iranian officials noted that a deal was not yet close and that diplomacy takes time. Asian equities ended higher on Friday with the Nikkei +2.7%, Shenzhen +1.3%, and the Hang Seng +0.9%. Locally the ASX 200 closed +0.4% as materials and energy sectors outperformed at +1.3% and 1% respectively. No local economic data out today, with the next major release being our local inflation figures on Wednesday. The Aussie will likely be off to a quiet start to the week given public holidays in the UK and US today, as investors will be closely watching for developments out of the Middle East.
USD
AUDUSD opens flat this morning at 0.7156 as markets await fresh cues regarding US-Iran negotiations on a peace deal. Wall St. traded higher to round out last week with the Dow Jones closing +.6%, the S&P 500 +.4%, and the Nasdaq +.2%. U.S.10-year yields fell 1bp to 4.56%, while Brent Crude closed +.6% at $104 a barrel. The Revised UoM Consumer Sentiment released over the weekend at -44.8 (forecasted at 48.2) and marked the third straight monthly decline, with negative revisions for Current Conditions and Expectations while inflation expectations were revised higher. Today will be a bank holiday in the US as they observe Memorial Day and the rest of the week is looking light on the economic calendar, with the next major release for the US being Core PCE Price Index m/m & Prelim GDP q/q this Thursday.
EUR
AUDEUR comes in flat this morning at 0.6146, having remained relatively stable over the past week. European equities were stronger at the close, with the DAX and CAC coming in at +1.1% and +0.4% respectively. The German IFO Survey for May printed at 84.9, up slightly from 84.5 and better than expectations of 84.2. No data out of Europe today, with the next major release this week being the ECB Financial Stability Review on Wednesday.
GBP
AUDGBP begins the week in the red at 0.5306 as the pair faces changing global dynamics and domestic economic expectations. The FTSE also closed a touch higher at +0.2%. Retail Sales m/m released late Friday afternoon at -1.3% (forecasted at -0.6%) which was the sharpest fall in almost a year. No data today as the UK will be observing a Bank Holiday, and a quiet week ahead with no major data releases scheduled.
NZD
AUDNZD opens in the green at 1.2181 this morning. No data out today with the main focus this week being the RBNZ interest rate decision this Wednesday. They are considered likely to hold rates at 2.25%, while discussing when to hike given the inflationary pulse from energy costs.