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U.S. equity markets were stronger to end the week following some solid wages data on Friday evening. The Nasdaq closed +1.1%, the S&P 500 +1.0% and the Dow +0.6%. U.S. 10-year yields rose 4bps to 3.7%, and crude oil fell 3.0% to $73.60 a barrel. AUD/USD traded 0.6752/0.6816 before closing the week at 0.67655.
US Core PCE for July was 0.2% MoM as expected with the YoY result at 2.6%, slightly lower than forecasts of 2.7%. Personal Income rose 0.3% against expectations of +0.2% while Personal Spending rose 0.5% as expected.
Across the border, Canadian GDP for July was flat MoM and +1.2% YoY, weaker than expectations of +0.1% and +1.4% respectively.
The USD firmed across the board in the aftermath of the data with the local unit falling to lows of 0.6775 while NZD/USD fell to 0.6242 and EUR/USD and GBP/USD made respective lows of 1.1054 and 1.3131. USD/JPY popped to 145.74 while USD/CAD moved up through 1.3500 to hit 1.3509.
Released later in the session, Chicago PMI for August rose to 46.1, up from 45.3 and better than expectations of 44.8. The University of Michigan Sentiment Survey for August was revised up to 67.9 from an initial reading of 67.8 though this was short of expectations of 68.1. Again limited reaction to the data.
Day Ahead
A quiet start expected to the week with the U.S. out for the Labor Day holiday. Data highlights for the rest of the week include Australia’s Q2 GDP and the BoC’s decision on Wednesday and US employment data on Friday.AUD/USD traded in a 0.6752/.68165 range on Friday before closing at .67655. Offering interest remains ahead of 0.6870, while demand rests in the 0.6700/20 region.
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6771 |
| AUD/NZD | 1.0839 |
| AUD/JPY | 99.13 |
| AUD/CNH | 4.8039 |
| AUD/EUR | 0.6130 |
| AUD/GBP | 0.5156 |
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