Forex price action was as exciting as watching paint dry, as a lack of catalysts kept traders on the sidelines.
- AU MI leading index up by 0.1% vs. 0.2% decline in June
- AU wage price index (q/q) rises by 0.5% as expected vs. 0.6% uptick in Q1 2017
Australia’s data releases
With not a lot of reports from other major economies, traders, had time to focus on Australia’s data releases.
The Westpac-Melbourne Institute Leading Index clocked in a 0.1% uptick in July from a 0.2% decline in June. A closer look, however, tells us that the pace of economic activity relative to trend three to nine months into the future only rose from -0.54% to -0.10% in July.
For Westpac’s Chief Economist, this means “below trend growth momentum” that could make the RBA think twice about its 3.25% growth projections in 2018.
Australia’s closely-watched quarterly wage price index was also a bit iffy.
Quarterly wages inched 0.5% higher as traders had expected against Q1 2017’s 0.6% increase. This translates to an annualized growth of 1.9%, the same as in Q1 and remains the record low for the report. In fact, it’s less than half the growth rate workers enjoyed a decade ago when a mining boom boosted pay across Australia!
Wages in the private sector went up 0.4% while those in public sector grew by 0.6%.
Overall, the numbers support the RBA’s worries that better labour market conditions won’t exactly translate to higher inflation. Australia’s jobs report is due tomorrow, so y’all best read up to know what you should look for!
Higher oil prices
According to the American Petroleum Institute, U.S. crude inventories fell by 9.2 million barrels in the week to Aug. 11 to 469.2 million.
This is lower than the expected 3.1 million barrel drop, so it helped boost Black Crack higher during the early Asian session. Meanwhile, gasoline stocks rose by 301,000 barrels against traders’ expectations of a 1.1-million barrel decline.
Despite that, Brent crude oil is now trading 0.63% higher at $51.12 while U.S. crude oil prices is also up by 0.53% to $47.80.
Major Market Mover(s):
Other major currencies and indices might be dealing with tight ranges, but only the Aussie was able to take advantage of Australia’s good headline numbers and overall appetite for commodities.
AUD/USD is up by 12 pips (+0.15%) to .7833,
AUD/JPY is up by 20 pips (+0.23%) to 86.66,
AUD/NZD is up by 20 pips (+0.19%) to 1.0826, and
EUR/AUD is down by 22 pips (-0.15%) to 1.4988.
Watch Out For:
- 9:00 am GMT: Italy’s preliminary GDP (q/q) (0.4% expected, 0.2% previous)
- 9:30 am GMT: U.K.’s employment numbers (Read Forex Gump’s trading guide here!)
- 10:00 am GMT: Euro Zone’s flash GDP (q/q) expected to remain at 0.6%