Aussie, kiwi gain as US shares rebound
Financial markets started the new week more positively with the US’s Dow Jones index shaking off five days of losses for a small win on Monday night.
The Dow Jones gained 0.1%, the S&P 500 was up 0.3%, while the Nasdaq climbed 0.6%.
Commodities were also stronger with copper up 0.4% and crude oil up 1.8% as both markets climbed from recent lows.
The Australian and New Zealand dollar were lifted by the overnight improvement in sentiment.
The AUD/USD and NZD/USD both gained 0.8% as both pairs climbed from recent lows.
Empire State index adds to global manufacturing worries
The US dollar was pressured, with the US dollar index falling from one-month highs, after a plunge in a key US manufacturing gauge.
The New York Fed’s Empire State manufacturing index continued to show weakness in US manufacturing with the index at -31.8 versus the -3.75 expected.
Chinese data is in focus today with key monthly activity data due.
China has also recently seen a turn lower in manufacturing activity as it reversed the gains seen earlier in the year as the country emerged from last year’s lockdowns.
Today, industrial production will be closely watched for details on Chinese manufacturing activity, while retail sales provide a guide to household consumption.
This data, along with fixed asset investment and employment releases, is due at midday AEST.
Euro still pressured as ECB weighs
The euro saw only small gains overnight with the currency unable to significantly benefit from the greenback’s weakness. The euro was weaker versus both the Aussie and NZD.
The euro has clearly underperformed since this month’s European Central Bank decision. Financial markets now see between only one and two more hikes from the ECB causing the euro to give back some of its recent performance.
The euro’s strength this year has been driven by a growing divergence in expectations around the Fed and ECB’s next moves – but as markets scale back expectations for the ECB, the euro has weakened.
Aussie rebounds overnight, especially versus euro
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 15 – 19 May
All times AEST
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