Late Friday night the US employment figures reported an additional 215,000 jobs in July. However, the figure was considered below par. The market was expecting at least 222,000 jobs to be created this month. The previous figure for June achieved 231,000 jobs; the disappointing figure provided the AUD with more support before close of the market.
Over the weekend, China scheduled two important economic releases; Trade Balance and also their Inflation figures. As the figures were released on the weekend the market reaction was not until Monday morning. Investors were expecting the Trade Balance figure to show a huge expansion on the previous of 46.5 Billion to 53.4 Billion this month. The market received a disappointing figure of 43 Billion, over 10 Billion less than the expected figure.
The inflation figure in China actually came in above expectations at 1.6% from the expected 1.4%. Since February this year, the Inflation figure has improved vastly. However, more eyes are starting to look at the Producer Prices Index (PPI) in China, which is a leading indicator of Consumer Inflation. The PPI in China is currently on a 5 year low, at -5.5%. The figure in the last 12 months really started head into the contractionary figures. This has led to economists saying that this figure may be a reason for further monetary easing in the Chinese economy. Over the weekend the market data out of China placed additional downward pressure on the AUD. However, the AUDUSD only fell 0.2- 0.3% and is still above last week’s lows.
To start this week off, we have Australia’s Business and Consumer Confidence figures; Tuesday and Wednesday respectively. Business confidence figures in Australia are still heading north and are expected to continue, the last four releases have shown strong growth in confidence, mainly from the recent monetary easing in Australia. Consumer Confidence in Australia has been quite the opposite; the last few releases have shown contractionary results. These figures have the potential to continue the recent AUD upward trend as the monetary easing should eventually flow on the Consumer figure as well.