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AUDUSD has weakened, falling to 0.6650, partly due to generally lower commodity prices. Meanwhile, NZDAUD has continued to climb, reaching nearly 0.9300 early this morning. Australian Q1 GDP data will be released at 1:30pm NZT, with consensus expecting a modest 0.2% increase.
Equity markets eased as data from the US and Germany suggested weakening labour markets. The yield on the US 10-year bond dropped by 5bps to 4.33%, increasing the likelihood of a rate cut. However, the USD DXY is holding steady in the low 104s, limiting significant gains for the Kiwi.
Today, data releases include Australia Q1 GDP data, Japan Wages and China Caixin PMI. Tonight, the US ADP employment report and ISM services index will be released (last month, the latter caused market movement when it unexpectedly dropped below 50, but the consensus expects it to rebound to 51.0). The Bank of Canada might start its easing cycle, with a majority of economists anticipating a 25bps cut in the policy rate to 4.75% and the market pricing an 80% chance of this happening.
Economic data to watch out for.
• AU – 1Q. GDP y/y
• CN – May. Caixin China PMIs
• FR – Apr. Industrial Production y/y
• EU – Apr. PPI y/y
• UK – S&P Global UK Services PMI Business Activity SA
• US – May 31. MBA Mortgage Applications
• US – May. ADP Employment Change
• CA – May. S&P Global Composite PMIs
• CA – Bank of Canada Rate Decision
• US – May. S&P Global PMIs and May. ISM Services Index
Mid market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6647 |
| AUD/NZD | 1.0764 |
| AUD/JPY | 103.09 |
| AUD/CNY | 4.8181 |
| AUD/EUR | 0.5673 |
| AUD/GBP | 0.5203 |
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