Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
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Key Data Being Released Today
Australia: RBA (0.1% unchanged)
New Zealand: Trade Balance (-477 million)
Japan: Unemployment rate (2.8% expected)
Macro Report
A risk-on mood overnight capped off a turbulent first month for 2022. Equity markets in both Europe and the US were firmly higher, the NASDAQ closing up 3.4%, and the S&P rallying almost 2%.
Major currencies were stronger against the US dollar in European and US trade. The Aussie dollar rose from US70.10 cents to US70.75 cents and was near US70.65 cents in late US close. The Euro rose from US$1.1145 to US$1.1245 and was near US$1.1230 in late US trade.
US treasuries were little changed on Monday. Investors digested comments by Atlanta Federal Reserve President Raphael Bostic in the FT over the weekend, not ruling out a 50 basis point rate increase at the March meeting. It is worth noting, given how closely markets are watching comments from Fed members at the moment, that these remarks were later clarified that a 50bps move in March was not the Fed’s preferred policy action and that the Fed is not fixed on a set policy progression.
San Francisco Fed President Mary Daly told Reuters in a brief phone interview, “We definitely are poised for a March increase, but after that, I want to see what the data brings us”. As a reminder, US non-farm payrolls cap off this week’s economic releases, expectations are for a median of 153,000 Jobs being added in January.
US 10-year yields were flat near 1.78%. And US 2-year yields rose by 1 point to near 1.18%.
In the US Economic News, the Chicago purchasing managers index rose from 64.3 to 65.2 in January (survey: 61.7). The Dallas Federal Reserve manufacturing index fell from +7.8 to +2.0 in January (survey: +8.0).
Ahead today and overnight, In Australia, the Reserve Bank Board meets with an announcement at 2:30pm. Eyes will be peeled for any clues around the boards thoughts on the job market, the QE program, and any potential tightening in policy. Whilst in the US overnight, the ISM and Markit purchasing manager indexes are released with JOLTs job openings and construction spending. Again, releases on jobs will be closely scrutinized for any read-through on implications for FED policy.
Many Asian markets will be closed today in observation of Lunar New Year.
AUD/USD Daily Chart
DXY (USD INDEX) Daily
Major Global Markets
| Currencies | Level | Change (%) |
| AUD/USD | 0.7066 | -0.01 |
| AUD/JPY | 81.339 | -0.05 |
| AUD/CNH | 4.5053 | 0.04 |
| DXY | 96.6520 | -0.64 |
| Rates | Yield (%) | Change (%) |
| US 10 Year | 1.777 | 0.01 |
| Aus 10 year | 1.935 | 0.02 |
| Equities | Level | Change (%) |
| S&P 500 | 4516 | 1.89 |
| NASDAQ | 14930 | 3.29 |
| ASX 200 | 6972 | -0.24 |
| Commodities | Level | Change (%) |
| Iron Ore | 127.33 | -0.69 |
| Gold | 1797.92 | 0.00 |
| Brent Crude oil | 89.31 | 1.31 |