S&P 500 — US Large Cap Index
FTSE 100 — UK Blue Chips
Euro Stoxx 50 — Eurozone Leaders
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CAC 40 — French Market Index
Nikkei 225 — Japan Benchmark
Hang Seng — Hong Kong Index
Shanghai Composite — China Mainland
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Bovespa — Brazil Equities
JSE Top 40 — South Africa Index
IPC Index — Mexico Market
- Australian Dollar holds losses as China’s Retail Sales rose 0.2% YoY in April, against 2.0% expected and 1.7% prior.
- Fed officials prioritized controlling inflation, suggesting further interest rate hikes remain necessary if price pressures persist.
- The US Dollar finds safe-haven support as the US and Iran remain far from an agreement.
AUD/USD loses ground for the third consecutive day, trading around 0.7130 during the Asian hours on Monday. The pair depreciates following key economic data from Australia’s close trading partner, China.
China’s Retail Sales rose 0.2% year-over-year (YoY) in April vs. 2.0% expected and 1.7% in March. Chinese Industrial Production climbed 4.1% YoY in the same period, compared to the 5.9% forecast and 5.7% seen previously. Meanwhile, the Fixed Asset Investment came in at -1.6% year-to-date (YTD) YoY in April, weaker than the expected increase of 1.6%. The March reading was a rise of 1.7%.
The AUD/USD pair also loses ground as the US Dollar (USD) rises on the US Federal Reserve (Fed) shifting toward a more aggressive policy stance on inflation. Several Fed officials recently emphasized that controlling inflation is their top priority, even suggesting that further interest rate hikes could be necessary if price pressures persist. Financial markets have sharply increased the likelihood of a December rate hike to nearly 48%, up significantly from just 14% a week prior, according to the CME FedWatch tool.
Meanwhile, the Greenback is receiving support from increased safe-haven demand amid ongoing geopolitical conflicts. The United States (US) and Iran remain far from an agreement to end weeks of fighting and reopen the critical Strait of Hormuz shipping route.
US President Donald Trump escalated tensions by publicly warning Iran to make progress or face new consequences. Because the Strait remains effectively closed, global oil prices are continuing to climb, which places a heavy economic burden on countries that rely heavily on energy imports. Global investor anxiety is heightened further by warnings from Chinese leader Xi Jinping to President Trump that Taiwan could trigger direct clashes between their two economies.
