AUD: Some broader Weakness emerging

• Some broader lows for the EUR here, initially a function of the Dollar bid, but the Currency is now testing intraday lows against the GBP, USD, JPY, CAD, CHF, TRY.
• The Dollar breaks new highs versus the GBP, AUD, TWD, CNH, CHF, PLN, CZK, NOK, MXN, NZD, CAD, and the SEK.
• The EURUSD is testing the 50day EMA right here at 1.1599.
• As the worst performer, the NZDUSD targets 0.5829, Yesterday's low, but Market Participants will look at 0.5800 for better support.

The IFO employment barometer decreased marginally to 93.8 points in August, from 94.0 in July. "The labour market is still stuck in crisis [...] The stagnating economy is making companies act cautiously when it comes to personnel planning", IFO comments.

• In industry the indicator rose to its highest since August 2024 (-17.1 vs -18.1 July). "although the barometer rose again, the signs are nevertheless still pointing to job cuts, albeit to a lesser extent than in the previous month. In all key industrial sectors, there were more layoffs than new hires."
• In services, the indicator has slipped into negative territory (-1.4 vs 0.5 July), having hovered around neutral for broadly a year now. "While temporary employment agencies are struggling with a slump in demand, the tourism sector is busy hiring."
• Note that today's release of German consumer confidence has mentioned expectations for potential job cuts likely weighed on the print.
• 'Hard' German labour market data is scheduled for this Friday, with the (seasonally-adjusted) unemployment rate expected to remain stable at 6.3%.

The latest polling from Ifop (carried out on 26 Aug, after PM Francois Bayrou's announcement of a confidence vote in his gov't) found a large majority of respondents in favour of the dissolution of the National Assembly and snap legislative elections. In total, 63% of respondents favoured dissolution, with 33% "absolutely" in favour. This represents an increase in overall support for dissolution from 41% in June and 50% in July. 

• Unsurprisingly, those in favour of dissolution are largely supporters of opposition parties. Among far-right Rassemblement National (National Rally, RN) supporters, 86% are in favour of snap elections, as are 75% of those who vote for the far-left La France Insoumise (France Unbowed, LFI). Only 36% of supporters of President Emmanuel Macron's centrist Rennaissance support snap elections.
• In terms of whether respondents believe President Macron will dissolve the National Assembly 49% say they think he will, 51% believe he will not. The proportion of those that think the president will call snap elections has increased from 30% in June and 34% in July.
• Seventy-four per cent of respondents believe the defeat of Bayrou in the upcoming 8 Sep confidence vote would be a sign France is "ungovernable". A total of 68% believe if snap elections take place and once again there is no clear governable majority, Macron would have to resign as president, but only 50% believe that LFI leader Jean-Luc Melenchon was right to move to dismiss Macron.
• Data from Polymarket shows bettors assigning a 20% implied probability that fresh elections are called by 15 September, rising to 41% by year-end.