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MACRO REPORT
AUD/USD posted its biggest daily loss in a fortnight as the pair reversed from a five-month high of 0.7063 on downbeat US data and soured market sentiment as recession fears resurfaced. The Aussie has since consolidated around the mid-0.6900s as markets await cautiously for the Australian jobs report, set to release at 11:30 a.m. AEDT. At the time of writing, the AUD/USD is trading at 0.69444, down 1.12%.
During the Asian trading session yesterday, the BOJ announced they would maintain their rate at -0.1%, giving momentum to the USD/JPY bulls. China-related headlines also added to the Aussie’s bearish momentum. However, the release of poor US data was the primary reason the Aussie failed to hold on to its recent gains.
US PPI m/m printed -0.5% while retail sales m/m came in at -1.1%, both below expectations of -0.1% and -0.8%, respectively. Investors were quick to adopt a risk-off mood on the grounds that a soft landing seemed unlikely. Data was followed by remarks from Fed officials emphasising the need for rates to rise further to restore price stability. This came as a saviour for the US Dollar while driving equity markets to end the day in red.
Other than local unemployment data, markets will be eyeing US data, including housing starts, building permits, weekly initial jobless claims, and the Philly Fed manufacturing index. Additionally, a few FOMC members are scheduled to speak.
KEY DATA TO WATCH
| Australia | – | Employment Change (Dec) |
| Full Employment Change (Dec) | ||
| Participation Rate (Dec) | ||
| Unemployment Rate (Dec) | ||
| United States | – | Building Permits (Dec) |
| Housing Starts (Dec) | ||
| Initial Jobless Claims | ||
| Philadelphia Fed Manufacturing Index (Jan) | ||
| Philly Fed Employment (Jan) |