Aussie Dollar Lifted Ahead of Key GDP Data
AUD
The Aussie Dollar sees a lift against the majors, with a leaked argument between Trump and Netanyahu showing that the US may have less of an appetite for further war in the Middle-East. Asian equities were mixed into the close, with the ASX down 0.1% and the SHANGHAI COMP up 0.4%. Building approvals in Australia fell -3.4% in April from March, extending the fall over the last two months to -13.6%. The 1Q Current Account Deficit printed -A$27.1bn, estimated at -23.4bn. At 11:30 this morning Australia’s GDP q/q is set to be released, expected to raise 0.5%, down from 0.8%. This could mark the beginning of a slowdown in the Australian economy, with the impact of the 75bp in RBA hikes this year yet to flow through, higher inflation (partly from oil prices) causing negative real wages growth, and the housing market showing signs of weakening. Tomorrow afternoon, RBA Gov Bullock is due to testify (along with Assistant Governor Christopher Kent) on the budget before the Senate Economics Legislation Committee.
USD
The AUDUSD sees a small lift overnight, with the pair keeping fairly flat to open this morning at a rate of 0.7179. A subdued session overnight saw US equities trade positively with the Dow Jones close +0.5%, the S&P 500 +0.2% and the Nasdaq +0.1%. U.S. JOLTS Job Openings for April rose to 7.62M, up from 6.89M and above expectations of 6.87M and marked the highest level since 2024. The ISM Services Index, scheduled for release tonight, is expected to increase modestly to 53.8, remaining in expansionary territory. The index saw a slight moderation in April, resting at 53.6. The employment sub-index improved after reaching its lowest level since Oct-23 during the previous month, but nevertheless remained in contractionary territory. ADP Non-Farm Employment Change is set to be released tonight, expected to tick up to 118k from 109k.
EUR
The AUDEUR pushed higher overnight, seeing a 2 week high reached, opening this morning at a rate of 0.6173. European equities closed in the green, with the DAX up +0.5% and the CAC up +0.8%. Europe had inflation data released last night, with the Core CPI Flash Estimate y/y coming in higher at +2.5%, from +2.2% and CPI Estimate y/y came in as expected at 3.2%, up from 3%. Looking ahead, Services PMI’s are set to be released, expected to all remain flat, all contractionary under the 50 figure.
GBP
The AUDGBP sees a small gain to start Wednesday, with the pair keeping very natural on the light data, opening this morning at a rate of 0.5331. British equities were flat into the close, with the FTSE closing up +0.1%. BOE Gov Bailey spoke last night, and noted that the “outlook is for slower growth, not recession”, showing confidence in the British economy despite the data outlook. Tonight will see Final Services PMI to be released, expected to remain at 47.9.
NZD
The AUDNZD sees some lift, with the pair slowly climbing all of yesterday to open at a rate of 1.2113. GDT Price Index came out last night, with a big drop to -0.6% from 0.6%. Overseas Trade Index q/q also dropped, coming in at -2%, est. -1.2% from 3.7%. There is no further data out today, and no impactful data for the rest of the week.