Weak US retail sales uplift AUD
AUD
The Aussie Dollar remains stable over the weekend, opening against the majors flat, with only gains against the US with markets lowering chances of a future Fed hike. Asian equities where soft into the close, with the ASX closing down 0.8% and the SHANGHAI COMP flat. Locally CB Leading Index m/m was released on Friday, keeping inline at 0.3%. In China, July activity data will be released today. Economists expect growth momentum to remain lackluster, with domestic demand continuing to weigh on overall activity. Retail sales growth is expected to slow to 1.5% YoY, reflecting weak consumer confidence and fading support from earlier subsidy programs. Industrial production growth is likely to remain steady at around 5% YoY, broadly unchanged from June, as robust exports continue to provide support. Locally we have Employment Data released on Thursday, with this being a major factor for the RBA’s monetary policy, a tight labour market reading will likely kill any hopes of a hike this year.
USD
The AUDUSD opens the week higher at 0.7086, moving up from Friday's 0.7060 open and trading near recent highs. The US Dollar faced heavy selling pressure after a big miss in US consumer data. This weakness outweighed any safe-haven buying triggered by rising US-Iran tensions and higher oil prices. Wall Street ended Friday's session in the red as markets reacted to signs of a slowing economy and geopolitical uncertainty. The Nasdaq fell 0.4%, the S&P 500 closed 0.3% lower, and the Dow Jones dipped 0.2%. Looking ahead, the US economic calendar is quiet until Thursday, when the Federal Reserve releases its FOMC meeting minutes. Markets will be closely watching Fed Chair Kevin Warsh's commentary for any clues on future interest rates. Later that same evening, weekly unemployment claims will be published.
EUR
The AUDEUR is opening flat at 0.6124, keeping the pair in a tight range. Broad Euro strength against the US Dollar late last week perfectly balanced out the Aussie Dollar's own gains, leaving the cross rate mostly unchanged. European markets saw a mixed finish to the week. Germany's DAX performed well with a 0.5% gain, while France's CAC 40 slipped by 0.2%. After a quiet end to last week, the Eurozone data calendar remains empty to start this week. However, volatility is expected on Wednesday when ECB President Christine Lagarde speaks, as investors will be listening closely for hints about interest rates. On Friday, a full slate of Flash Manufacturing and Services PMIs (key indicators of business activity) will be released.
GBP
The AUDGBP opens slightly lower at 0.5233. The British Pound held its ground well into the weekend, supported by solid backward-looking economic growth data. This stopped the Aussie Dollar's upward momentum on the cross and helped the Pound test recent highs. The UK's FTSE 100 closed down 0.2% on Friday, with rising energy prices and fears of a broader Middle East conflict weighing on the London stock market. Looking ahead, focus shifts to the Claimant Count Change - a key early indicator of the job market released a month ahead of the next interest rate decision. Following that, the UK will release its CPI inflation print, which is expected to rise to 2.9%.
NZD
The AUDNZD opens the week lower, with the pair dropping lower over the weekend, opening this morning at a rate of 1.2029. This morning saw the BusinessNZ Services Index come out at 50.6, previously 50.9, and the FPI m/m dropped to 0.1%, previously 0.6%. there is no further data out until Wednesday Morning, with their PPI set to be released.