Aussie Dollar Flat as Domestic Jobs Data Approaches
AUD
The Aussie Dollar opens the day flat against the majors, as markets weigh a surprisingly soft local data print against near-certain expectations for a Reserve Bank rate hike next week. Asian equities finished stronger yesterday with the Hang Seng +.2% and Shenzhen +.1%, while the Nikkei was closed due to Japan’s Citizen’s Holiday. Locally the ASX 200 ended +.3% as technology and consumer discretionary sectors led the pack at +2.7% and +1.3%. RBA Gov Bullock spoke at a fireside discussion around inflation, mentioning that higher unemployment of 4.5%-5% could be what is needed to quell inflation. PMI’s were released this morning, coming in lower, with Flash Manufacturing PMI dropping to 49.3 from 52 and Flash Services PMI softened to 51.3 from 53.3. All attention now shifts to this week’s primary data piece, the employment report out tomorrow, expected to show an increase of 22.5k.
USD
AUD/USD opens the day flat, with the pair keeping buoyant above the 0.71 barrier, opening this morning at a rate of 0.7114. A mixed session on Wall St. saw the Nasdaq close +0.5%, the Dow Jones -0.4%, and the S&P 500 unchanged on the day. President Trump spoke last night at the UN general assembly, urging nations to join in economic isolation of Iran. Iran informed the Trump administration that it will open the blocked Strait of Hormuz "within seven days" if it accepts demands such as lifting the U.S. military blockade of Iranian ports. Overall risk did drop inline with Oil prices on hopes the Strait of Hormuz and a Saudi pipeline will open, but the energy price spike is hitting inflation. Tonight there is Flash Manufacturing and Services PMI data out, expected at 53.6 and 55.8 respectively.
EUR
AUD/EUR opens this morning flat at a rate of 0.6213. European equities were soft into the close, with the CAC closing up 0.2% and the DAX flat. ECB President Lagarde spoke twice yesterday, with no effect on markets. Tonight's flash PMI round is the main event for the bloc, with French Manufacturing and Services readings (previous 51.1 and 48.0), German Manufacturing and Services (previous 54.3 and 49.7) and the bloc-wide Manufacturing and Services gauges (previous 52.7 and 51.6) all due. The next ECB rate decision is not due until 29 October.
GBP
AUD/GBP is a touch firmer at 0.5331, holding a tight range after a mixed session for the Pound. London's FTSE 100 slipped -0.3% on Tuesday. UK data was more encouraging, with the CBI Industrial Trends Orders survey improving sharply to -9 in September (from a previous -25), its best reading in years. Tonight brings the UK's Flash Manufacturing and Services PMIs (previous 51.7 and 52.5). The rest of the week looks quiet data wise with the next key point coming this Friday when BOE Gov Bailey will participate in a panel discussion at the Monetary Economics Conference.
NZD
AUD/NZD has eased slightly to 1.2420 this morning. There is no New Zealand data due today. The RBNZ lifted the Official Cash Rate by 25 basis points to 2.75% earlier this month and remains in a tightening cycle; its next Monetary Policy Review isn't due until 28 October.