FOREX: AUD Crosses - AUD Outperforms, GBP/AUD Leads
US Equities momentum higher looks to be stalling, only the Google judgement helping overnight to reduce losses. US Futures have opened slightly higher this morning following through with the Goggle news, E-minis +0.15%, NQU5 +0.25%. The AUD remains on the front foot in the crosses, GBP/AUD being the standout as it approaches support.
- EUR/AUD - Overnight range 1.7847 - 1.7934, Asia is currently trading around 1.7856. The area just above 1.8100 has seen decent supply cap it the last few months, a sustained move above 1.8100 is needed to see the move regain momentum higher. The pair has drifted back towards its first support around the 1.7800 area, expect some demand here first up, below there next support is around 1.7600.
- GBP/AUD - Overnight range 2.0524 - 2.0691, Asia is trading around 2.0530. The pair could not get back above 2.0700 and accelerated lower overnight. Focus will now turn back to the 2.0400 area where solid demand has been seen since March this year to maintain the 2.0400 - 2.1000 range, expect demand to be around here first up.
- AUD/JPY - Overnight range 96.48 - 96.87, Asia is trading around 96.80. The pair has broken back above 96.50 which starts to negate the downward direction, a sustained break above 97.50 is needed to reignite the upward trend. Until then looks to be 94.50 - 97.50.
- AUD/NZD - Overnight range 1.1105 - 1.1122, the cross is dealing in Asia around 1.1125. The Cross is consolidating around 1.1100, dips back towards 1.1000/1.1050 should be supported now.
Fig 1: GBP/AUD spot 2H Chart
Source: MNI - Market News/Bloomberg Finance L.P
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FED: Trump To Announce Candidate To Replace Kugler In Next Few Days
US President Trump has stated that he will announce a candidate to replace Fed Governor Kugler in the next few days. Rtrs notes: "U.S. President Donald Trump said on Sunday he will announce a candidate to fill an open position at the Federal Reserve in the next couple of days. The Fed said on Friday that Governor Adriana Kugler was resigning early from her term, leaving an opening for Trump, a sharp critic of the U.S. central bank's leadership, to fill."
US TSYS: Cash Open
TYU5 is trading 112-10+, up 0-04 from its close.
- The US 2-year yield opens around 3.66%, down 0.02 from its close.
- The US 10-year yield opens around 4.206%, down 0.1 from its close.
- Daily Chartbook on X: "If not for collapsing labor force participation since April, unemployment would've climbed to 4.9% [yesterday] instead of 4.25%." @Econ_Parker. See Graph Below.
- Brian Sullivan on X: “Goldman Sachs notes that the recent 2 month job revisions were the largest outside recessionary times since … 1968. Goldman expects more large revisions next month.”
- MNI BRIEF: Fed Hammack: Jobs Bear Watching, Inflation To Rise. "Disappointing signs" in the July jobs report bear careful watching, but the U.S. labor market remains largely in balance, Federal Reserve Bank of Cleveland President Beth Hammack said Friday after Bureau of Labor Statistics data showed a sharp slowdown in hiring over the past few months. "It looks like a healthy labor market that's still well in balance, but with some disappointing signs that we should watch very carefully," she told Bloomberg Television.
- The 10-year yield had a powerful move lower in reaction to the NFP data, breaking below its 4.30% pivot within the wider range 4.10% - 4.65%. This now turns momentum lower in yields and you could expect buyers of treasuries on bounces back towards 4.30/35% now looking to initially test the 4.10% area. The move was even more aggressive in the 2-year which has rejected the move back towards 4% and now looks to target the pivotal 3.50% area.
- Data/Events: Factory Orders, Durable Goods
Fig 1: US Unemployment
Source: MNI - Market News/@dailychartbook/Arch Capital
AUSTRALIA: June Consumption Growth Forecast To Rise
In a week of second tier data, the focus is likely to be on Tuesday’s June household spending data which will now replace retail sales, which had its last print last week. The Q2 chain volume measure is also out. Bloomberg consensus expects June consumption values to rise 0.8% m/m to be up 4.9% y/y after 4.2% in May. The ABS noted that discounting in the month had boosted June retail sales.
- Today, the July Melbourne Institute inflation gauge is released. It printed at 2.4% y/y in June above headline CPI at 1.9%.
- Tuesday sees the final services and composite S&P Global PMIs for July. The preliminary print saw a 2 point rise in the composite to 53.6 suggesting a pickup in growth at the start of Q3.
- June trade data are released on Thursday. The trade surplus is forecast to widen to $3.25bn from $2.24bn.
- In terms of the RBA, Head of Payments Policy Connolly participates in a panel at the ACCC/AER regulatory conference at 1045 AEST on Thursday.
