AUD Holds Steady as CPI Test Looms
AUD
The Aussie Dollar opens the day mixed across the majors as reports of fresh military strikes in Iran clouded optimism for an agreement between the US and Iran to reopen the Strait of Hormuz. Asian equities were subdued on Tuesday as the Shenzhen closed +0.5%, the Hang Seng flat, and the Nikkei 0.3%. The ASX closed -0.4% as utilities were -2.2% while materials were the only sector to close higher. This morning Aussie inflation data (CPI M/M, Y/Y & Trimmed Mean) is set to release at 11:30AM and is expected to show signs of slowing in April. Inflation is forecast to slow down to a 4.4% year-on-year rate, down from 4.6% in March, yet still at its highest levels since 2023. A higher than expected inflation reading could increase the odds for further policy tightening, although markets currently assign only a 10%-12% chance of a 25-bp rate hike in June.
USD
AUDUSD opens flat at 0.7167, trading in a narrow .7155/.7176 range as markets wait to see if there will be any further escalations in the Middle East, or if any progress will be made on a peace deal. Another mostly positive session on Wall St. saw the Nasdaq close +1.2%, the S&P 500 +.6%, and the Dow Jones -.2%. U.S.10-year yields fell 7bps to 4.49%, while Brent Crude rose 3.6% but remained under $100 a barrel. CB Consumer Confidence printed in the green overnight at 93.1 from an expected 91.9. Tomorrow, US Core PCE Price Index m/m, Prelim GDP q/q, Prelim GDP Price Index q/q and Unemployment Claims set to release at 0.3%, 2.0% 3.6% and 211k respectively.
EUR
AUDEUR opens flat this morning at 0.6161. European equities closed in the red, with the DAX -0.8% and the CAC -1%. This evening, ECB Financial Stability Review is set to release and will provide an assessment of conditions in the financial system and potential risks to financial stability. Tomorrow, ECB President Lagarde will be speaking at the 28th meeting of Francophone Central Bank Governors, in Cambodia.
GBP
AUDGBP opens in the green climbing 25-30 points overnight and settling to open at 0.5330. The FTSE closed in the green, at +0.2%. No major economic data scheduled out of the UK, however, BOE Gov Bailey is due to speak Friday evening at the Reykjavik Economic Conference hosted by the Central Bank of Iceland.
NZD
AUDNZD opens in in the green at 1.2280 ahead of their Cash Rate decision at midday today, in which they’re expected to hold at 2.25% for now, however, rate hikes are likely coming by end of year. A busy week for New Zealand continues with their Annual Budget Release expected to be released tomorrow.