Markets Await US-Iran Peace Deal Terms
AUD
The Australian dollar opens lower against the majors this morning, after ongoing disputes over the Strait of Hormuz as part of the US and Iran peace deal. Asian equities were weaker yesterday with the Hang Seng trading -1.5%, Nikkei -0.9% and the Shenzhen -0.15%. The ASX 200 ended +0.5% as materials and healthcare sectors led the pack. No local data to end the week, however Chinese trade data will be released today. This will be an important gauge of the Asian tech cycle and will be watched closely by policymakers given its role as the main driver of growth.
USD
AUDUSD opens lower this morning at 0.7031 after the greenback strengthened across the board. US weekly jobless claims data was mixed with initial claims at 199k to beat forecasts of 205k. Also released was the Q2 Unit Labour Costs which were +1.3% against forecasts of +2.1% while Non-Farm Productivity was +1.4%, beating forecasts of +0.6%. Wall St. closed the day in the red, with the Dow -0.9%, S&P 500 -0.2% and the Nasdaq -0.1%. Iranian officials were also quoted as saying that US and Israeli vessels would not be allowed to transit the Strait of Hormuz under a new deal and nations that caused damage to Iran would not be granted permits. US officials responded fairly quickly in saying that the Strait was an international waterway and no party controls it. The US employment report for July will be released tonight and is expected to show payroll growth of around +85k, while the unemployment rate is forecast to remain stable at 4.2%. The June report showed a deceleration in job gains, with nonfarm payrolls rising by +57k. The release is likely to help shape expectations for the FOMC’s near-term policy move.
EUR
AUDEUR opens lower this morning at 0.6101 despite Eurozone Retail Sales for June printing at -0.3% m/m, falling well short of expectations of +0.1% with the y/y number at +0.7% against expectations of +1.0% though prior numbers were revised higher in both cases. Eurozone equities closed in the green with the DAX +0.1%, and CAC +0.4%. Nothing major set for release out of the Eurozone today with only German Industrial Production m/m, and German Trade Balance.
GBP
AUDGBP opens lower this morning at 0.5227 after output levels fell again in the UK construction sector, but at the slowest pace since March. This contributed to a sustained rebound in business activity expectations for the year ahead. Supply chain performance meanwhile improved and input price inflation eased to a five-month low. At 44.7 in July, up from 38.4 in June. UK equities closed in the red with the FTSE -0.2%. Nothing major set for release out of the UK with only Lloyds HPI m/m.
NZD
AUDNZD opens lower this morning at 1.1986. Nothing to note from our Kiwi neighbours yesterday, and it will be another uneventful day with nothing set for release.