AUD Climbs as Weak US Jobs Data Cuts Fed Hike Odds

AUD

The Aussie Dollar pushes higher against the majors as Fed rate hike bets lower following some weak US jobs data over the weekend. Asian equities were mixed to end the week on Friday with the Shenzhen +0.9%, Hang Seng +0.5% and the Nikkei at -1.5%. The ASX 200 closed -0.1% as financials and healthcare sectors led losses at -1% each. China’s trade remained resilient in July as both exports and imports recorded double digit percentage growth from a year ago, coming in at 767B from 859B, expected at 735B. Chinese CPI and PPI y/y both came in lower, with CPI reading 0.5%, expected at 0.8% from 1% and PPI read 3.5%, expected at 3.9% from 4.1%. Looking at the week ahead, the main focus will be the RBA's Monetary Policy Board meeting tomorrow, although current expectations are for the cash rate to remain at 4.35%. 

USD

The AUDUSD opens the day higher with the pair cruising to a 2-month high, opening this morning at a rate of 0.7066. On Wall St. the Nasdaq closed +1.3%, the S&P 500 +.6%, and the Dow Jones +.3%. U.S. Non-Farm Payrolls printed at -23k for July, down from +20k and well below expectations of 80k with 2-month net revisions at -103k. The Unemployment Rate unexpectedly fell 0.1% to 4.1%, though this was in part due to a decline in the participation rate which slipped to 61.4% against expectations of an increase to 61.6%. Completing a poor report, Average Hourly Earnings rose 0.1% MoM and 3.2% YoY, weaker than respective expectations of +0.3% and +3.5%. The job losses and downward revisions showed that demand for workers is slowing even though the Unemployment Rate fell. Looking forward, a quiet start to the week for the US with CPI Inflation data on Wednesday being the main event. 

EUR

The AUDEUR opens in the green, with the pair reclaiming the 0.61 barrier over the weekend to open this morning at a rate of 0.6114. European equities finished the day higher, with the DAX finishing up 0.7% and the CAC up 0.2%. Friday saw German Industrial Production m/m come in as expected at 0.2%, down from 0.7%. A very quiet week ahead for the Europeans, with tonight having the Sentix Investor Confidence to be released, expected to raise to -0.7% from -3.1. 

GBP

AUDGBP opens slightly higher after reclaiming the losses occurred earlier last week to open this morning at a rate of 0.5237. British equities were soft into the close, with the FTSE closing up 0.3%. A quiet start to the week for the UK with all eyes on Thursday’s GDP m/m release, which is expected to retract from 0.1% to -0.1%. 

NZD

The AUDNZD opens the day flat at a rate of 1.1996. Looking at the week ahead, NZ Inflation Expectations q/q on Thursday will be the main focus, with some further minor data releases expected on Friday.