NAB business confidence to give Aussie direction

Australian Dollar:

As expected by most onlookers the Australian dollar did very little on Monday as the country had a public holiday nationwide apart from Western Australia. The Aussie began the session at 0.9337 and struggled to move 6 points from the open in subdued trade. As the day continued the Aussie drifted upwards on positive sentiment from a weekend where the Chinese trade balance was upbeat. The anticipation for overnight data was not much to wait on as there were no figures in the US coupled with public holidays across parts of Europe. As anticipated the AUD held its range however did drift slightly higher opening this morning stronger at 0.9353. Today we will see more action in the market as the NAB business confidence is to be announced along with Chinese CPI figures. The strength of local confidence data this week will be a good indication of how sentiment has tracked in the brief period of time since previously poor readings. The weak numbers came directly after the tough budget was released by the Liberal government last month.

• We expect a range today of 0.9305 – 0.9395

New Zealand Dollar:

In line with expectations the NZ dollar failed to make an impression on the market on Tuesday. Even though the New Zealand markets were open the closure across the Tasman of Australian business along with no domestic data slowed trade down. The NZ dollar opened at 0.8500 after succumbing to a strong Greenback to close last week however managed to drift upwards gaining nearly a quarter of a cent on sentiment and strong Chinese Trade balance figures over the weekend. Overnight the Kiwi lost all of the day’s gains drifting lower as broad US dollar strength was witnessed. The NZ dollar touched lows of 0.8480 against the US and opens this morning weaker than Monday at 0.8492. With local manufacturing sales early this morning and Chinese CPI data later today the market will feed off these numbers to take direction to begin the week.

• We expect a range today of 0.8445 – 0.8540

Great British Pound:

The British Pound opened on Monday at 1.6807 against the Greenback and without data to fuel the currency for direction and market closures in France, Germany and Australia traded within a 12 point range during Asian trade. Overnight the absence of economic figures in the US saw marginal US dollar strength and we see the Sterling open at 1.6800 marginally lower versus the Greenback this morning. Against the higher yielding currencies the Sterling drifted lower as the day began on limited trade losing a quarter of a cent against both the Aussie and Kiwi. In a similar flow to the movements against the US investors saw the British Pound lose against the Aussie dollar opening today at 1.7965. The NZ dollar however struggled overnight across the board and the GBP took full advantage gaining all of the day trade losses back to open higher at 1.9779. Investors will now turn their eyes to manufacturing production overnight and job numbers on Wednesday.

• We expect a range today of 1.7915 – 1.8015

Majors:

Monday was one of the quietest days on record as data was absent across the board and public holidays were widely spread. The Euro opened the week at 1.3644 and moved within a 5 point margin during Asian trade. Overnight investors saw more volatility in the market as broad US dollar strength was witnessed along with a falling Euro on the back of a poor investor confidence reading. The Euro fell nearly a cent during night trade however managed to consolidate to open 53 points weaker against the US dollar at 1.3591.

The Japanese Yen was one of the few currencies with data on Monday and a positive Gross Domestic Product figure saw the Yen gain ground by over 0.1 per cent against a helpless US dollar. Quarter 1 GDP figures were released higher at 1.6 per cent beating forecast by 0.2 per cent. 

Tuesday looks to be busier in regards to economic releases with European and US data back on the docket. Investors will pay close attention to gauge sentiment for the week to come.

Data releases:

• AUD: NAB Business Confidence, ANZ Job Advertisements m/m, Home Loans m/m
• NZD: Manufacturing Sales q/q
• JPY: Tertiary Industry Activity m/m, M2 Money Stock y/y, Prelim Machine Tool Orders y/y
• GBP: BRC Retail Sales Monitor y/y, Manufacturing Production m/m, Industrial Production m/m, 10-y Bond Auction
• EUR: French and Italian Industrial Production m/m,
• USD: NFIB Small Business Index, JOLTS Job Openings, Wholesale Inventories m/m