Equity markets across Europe and the U.S dipped overnight as preliminary U.S jobs numbers showed further improvements beating economists forecasts. The latest ADP figures suggest the U.S economy added 177,000 new jobs in July, while June's figure was also revised higher to 194,000. You're probably asking why stronger economic data would lead to a retracement in stocks however the answer is pretty straight forward and all comes back to interest rate expectations. With improved economic data the pressure mounts on the U.S Federal Reserve to continue a rate tightening cycle, higher interest means funding is more expensive for business and stocks therefore decline.
Iron ore prices dipped back below US$60 a tonne, weighing on the local currency however AUD/USD has managed to hold on to 0.7500. Aussie Private Capital Expenditure and Retail Sales are due out this morning along with a raft of Chinese manufacturing data.
DATA RELEASES TODAY:
CNY - Manufacturing PMI at 11.00am
AUD - Private Cap. Expenditure & Retail Sales at 11.30am
CNY - Caixin Manufacturing PMI at 11.45am
AUD EXCHANGE RATES:
AUD/USD – 0.7517
AUD/GBP – 0.5719
AUD/EUR – 0.6735
AUD/NZD – 1.0380
AUD/JPY – 77.671
***Above rates are indicative wholesale rates and intended as a guide only***
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Senior Corporate FX Dealer