Volatility was low for the Aussie, but it benefitted from a slight risk-on lean in global sentiment and a net positive round of Australian economic updates to take the top spot at the Friday close.
Australian Headlines and Economic data
Monday:
Australia ANZ job ads climb as Victoria state reopens – “Monday’s figures from Australia and New Zealand Banking Group ANZ.AX showed total job ads grew 13.9% in November from October, when they rose an upwardly revised 11.9%.”
China suspends beef imports from sixth Australian beef supplier – “China, which did not say why it took the latest decision, has already banned imports from five other Australian beef suppliers this year, citing reasons that have included issues with labelling and health certificates.”
The broad drop lower at the London open was likely driven by broad risk sentiment as the lack of a Brexit deal over the weekend likely put pressure on global risk assets at the start of trading in Europe.
Tuesday:
Australian NAB business confidence index improved from 3 to 12 in Nov
“While renewed optimism in Victoria drove the improvement in confidence, Victoria was one of only two states to report a deterioration in conditions, although we expect conditions to improve as the impact of its recent severe lockdown wears off. “
“Capacity utilization remains around 1.4ppt below its long-run average, while the capex and employment indexes remain in negative territory.”
ANZ Australia Roy Morgan weekly consumer confidence rises to 109.3 vs 107.5 previous week.
As China-Australia ties worsen, Iron ore remains bulletproof – “China is likely to remain reliant on Australian iron ore for the foreseeable future,” said Andrew Boak, Goldman’s chief economist for Australia. This reflects “the inelasticity of global supply and that China’s annual import requirement far exceeds the seaborne supply” of other nations.
Wednesday:
Australia consumer sentiment hits 10-year high
“The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday climbed 4.1% in December from November, when it had risen 2.5%.”
“‘After only eight months the evidence seems clear that sentiment has fully recovered from the COVID recession,’ said Westpac Chief Economist Bill Evans.”
Thursday:
Australian MI inflation expectations unchanged at 3.5% – “the proportion of consumers expecting prices to fall continues to decline. Wage expectations remain weak.”
RBA Bulletin: the unemployment rate will remain elevated for a number of years
“Long-term unemployed people are more likely to be older and male and have lower levels of formal education than those who have been unemployed for a shorter period.
The research shows the mean average of the long-term unemployed is 37 years of age, with 61 per cent male and with only 11 per cent having a university degree.”
The Aussie began a small, late week rally during the Thursday session, likely driven by positive risk sentiment. There doesn’t seem to be a direct catalyst for that shift, but it’s possible it may have been fueled by vaccine optimism and expectations of global recovery.
