AUD, NZD lifted by China data
The Australian and New Zealand dollars both climbed overnight after a stronger than expected result from Chinese March-quarter GDP but otherwise it was a quieter night in financial markets.
Chinese economic growth was reported at 4.5% in annual terms – above the 4.0% expected – with retail sales and urban investment also above forecasts.
While mostly positive, urban investment fell to the lowest level in 14 months, while manufacturing production disappointed in another sign that global demand is slowing.
The AUD/USD gained 0.3% while the NZD/USD climbed 0.4%.
Major markets pause after US shares hit resistance
In other markets, however, the action has dulled.
The US’s S&P 500 climbed 0.1% (after Monday’s 0.3% gain) while the Nasdaq was flat (after Monday’s 0.1% gain).
Similarly, US bond yields have been broadly steady, with the US two-year bond yield ticking up from 4.19% to 4.20% overnight.
Global markets have clearly paused as benchmark US sharemarkets reach major resistance at eight-month highs.
The S&P 500 has jumped 9.5% since 13 March as worries about the US banking crisis receded. Markets are now searching for another trigger to drive the next step higher.
Inflation in focus with UK, Eurozone and NZ all due
Financial markets will be focused on inflation over the next 24 hours with key releases from the UK, Eurozone and NZ all due.
The British pound, euro and New Zealand dollars have all recently been boosted as persistent inflation keeps the heat on their respective central banks.
Tonight, the UK is forecast to see headline inflation fall back from 10.4% to 9.8% – an eye-watering level still likely to give Bank of England governor Andrew Baily sleepless nights.
The relatively high UK inflation has seen the GBP stronger and pushed the AUD/GBP and NZD/GBP back to multi-month lows.
We’ve seen a similar story in the Eurozone but headline inflation is expected to remain steady at 6.9% – well down from the 10.6% seen in October.
From New Zealand, headline inflation is expected to climb over the March quarter – from 1.4% to 1.7% – while annual inflation is forecast to tick lower from 7.2% to 7.1%.
Aussie, kiwi boosted by China data
Table: seven-day rolling currency trends and trading ranges
Key global risk events
Calendar: 17 – 22 April
All times AEST
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