Aussie Dollar Flat Despite Strong Domestic Jobs Report

AUD

The Aussie Dollar opens flat against most major currencies despite a strong domestic jobs report. Asian equities were mixed in trade yesterday with the Nikkei +4.6%, Shenzhen +1.6% and the Hang Seng -1.4%. The ASX 200 closed -0.7% as energy and materials sectors underperformed at -2.5% and -2.3%. May Employment Change figures rose by 40.3K against expectations of 31.2K and the Unemployment Rate slipped to 4.4% from 4.5%. There was a notably muted reaction to the strong jobs report as the Aussie Dollar failed to gain any momentum from it. Across Asia, Japanese Core CPI y/y is set to release this morning, currently forecasted at 1.6% from a previous 1.3%. A quiet end to the week locally with no economic data expected, although RBA Gov Bullock is due to participate in a panel titled "From Cash to Stablecoins: The Anonymity of Money" on Sunday in Basel.

USD

AUDUSD opens flat this morning at a rate of 0.6907 after stronger than expected economic data from the US overnight overshadowed our strong employment figures. Geopolitical uncertainty adds another spanner in the works as Iran warns that safe passage through the Strait of Hormuz would only be allowed through routes designated by Tehran and that vessels ignoring instructions could face action. A subdued session on Wall St. saw the Nasdaq -0.5%, S&P 500 unchanged and the Dow +0.1%. WTI Crude was +1.8% to US$71.60/barrel, whilst the yield on the US 10 year note was unchanged at 4.39%. US Core PCE for May printed at +0.3% MoM and +3.4% YoY with both numbers matching expectations. Personal Income and Personal Spending were both +0.7%, beating respective expectations of +0.4% and +0.6%. Q1 GDP was revised up to +2.1% from +1.6% while Q1 Personal Consumption was revised down to +0.5% from +1.4% with Q1 Core PCE unchanged at +4.4%. 

EUR

AUDEUR trades sideways overnight to open at 0.6075 following a quiet week for economic data. European equities closed stronger with the DAX and CAC at +1.0% and +0.5% respectively. Yesterday the German GfK Consumer Climate survey printed at -29.2, expected at-27.8 from a previous -29.7, which showed a slight stabilisation in consumer confidence. Nothing major to end the week for the eurozone.

GBP

AUDGBP opens flat at 0.5236 after a week of navigating recent political uncertainty and softer UK economic data. The FTSE closed in the green at +0.7%. With no major releases expected out of the UK, the pair remains at the whim of any updates to geopolitical tensions in the Middle East.

NZD

AUDNZD sees a slight recovery to end the week at a rate of 1.2232 as the pair was pinned near multi-week lows on Thursday as the greenback gained broadly. Investors are now scaling back wagers for how far and fast rates in New Zealand might rise. A hike in July is now priced at 66%, from above 80% a week ago, and only two moves are seen this year rather than three.