- AUD/NZD: Aussie data beat estimates and is supportive of upside.
- AUD/NZD gets a boost from risk-on sentiment and tariff hike delays.
AUD/NZD has firmed in Asia following a series of Australian data that has helped to lift the pair within a trend that formed down in the 1.0450s. The pair is currently trading at 1.0524 having ranged between 1.0514 and 1.0535.
The commodity sector got a major boost overnight which has been reflected in the price of the antipodeans following news that the US and Chinese communications over trade seem to be finding traction and that talks were taking place over the phone where arrangements were being made for subsequent continuation meetings in September. Additionally, the Trump administration said it will delay imposing the 10% tariff on some Chinese products until mid-December. The Aussie was the top performer on the news and session overnight while the Yen was the worst.
Meanwhile, the Australia August consumer sentiment from Westpac and the Melbourne Institute arrived earlier and the wages data arrived within this hour. For consumer sentiment, the July survey was strikingly weak, -4.1% m/m to 96.5, a low since Aug 2017. For August, we had a jump to 3.6%. The passage of tax cuts and the prior central bank’s rate cut have likely contributed to the result, albeit taking their time to filter through. As for wages, for QoQ, the 2Q result came in as 0.6% vs the estimate of 0.5% and previous 0.5%. The Australian wage price index (YoY) 2Q arrived at 2.3% and inline. “2.3% is up from the 50 year lows of 1.9% seen in 2016-2017 but a long way below the 3.5% pace the RBA says is needed for inflation to return sustainably to the 2-3% target,” analysts at Westpac argued.