AUD

• US tariffs. Pres. Trump confirms tariffs on Canada & Mexico will go ahead next week. Another 10% will also be placed on imports from China.• Negative jolt. US equities lost ground. The USD rose, while AUD & NZD declined ~1%. AUD is back down near where it started the month.• More volatility. Headline driven markets point to more bursts of volatility. Since the late-80s the AUD has, on average, traded in a ~1% daily range. Global Trends A bout of risk aversion washed through markets with US tariff related headlines continuing to generate volatility. After indicating yesterday that the...

• US macro. US growth & inflation concerns rattled market nerves on Friday. Equities & bond yields declined. USD a little firmer. AUD & NZD slip back.• Policy trends. RBA still looks to be on a different path to many other central banks. This can be AUD supportive on a few of the major AUD-crosses.• Event Radar. In Australia the monthly CPI indicator is due (Weds). Offshore, several US Fed members speak & the PCE deflator is released (Fri night). Global Trends The state of play in the US economy rattled a few market nerves on Friday. Risk sentiment soured...

• Softer USD. Firmer JPY & positive rhetoric about a possible US-China trade deal weigh on the USD. AUD & NZD up at pre-Christmas levels.• US consumer. Update from Walmart raised concerns about the health of the US consumer. Household spending is the engine room of the US economy.• AU jobs. Another positive jobs report. Employment stronger than expected. Data supports the RBA’s ‘hawkish’ guidance about future rate cuts. Global Trends Economic data didn’t move the needle overnight, rather concerns about the health of the US consumer via an update from bellwether stock Walmart and hopes of a trade deal...

• Holding. Despite some swings in other asset classes net moves in FX have been modest. JPY outperformed. AUD still hovering near the top of its range.• RBNZ cuts. Another 50bp rate cut by the RBNZ yesterday. More easing is projected. This contrasts the RBA. We expect AUD to outperform the NZD.• AU jobs. Labour force data due today. Another solid set of figures anticipated. If realised, this will support the RBA’s ‘hawkish’ guidance about more rate cuts. Global Trends Mixed fortunes across asset markets overnight as geopolitical and economic news pushed and pulled on sentiment, especially in Europe. In...