AUD, NZD Out In Front; JPY Pressured, EUR Lower, Crude Mixed

through the early European session as AUD/USD reached US$ 0.9232, EUR/AUD came off to A$ 1.4442, AUD/JPY tested the ¥90.30 area, and GBP/AUD tackled A$ 1.6931. The Aussie found a bid after the PBoC’s Zhou pledged to keep the CNY stable at “equilibrium” along with a “prudent” monetary policy in H2 2013. Zhou also characterised the Chinese economy as “good” and said 7.5% GDP growth is a “normal level,” indicating China’s lovefeast with the Oz export sector may continue. Minor Aussie data saw July new motor vehicle sales move retreat lower. RBA’s August policy meeting minutes will be released tomorrow and may yield some clues on policy trajectory with the markets clearly indicating 2.50% is a near-term OCR floor. The Westpac June leading index is due on Wednesday, and June leading index on Thursday.

The New Zealand Dollar led the pack through the early European session with NZD/USD higher at US$ 0.8141, EUR/NZD weaker to NZ$ 1.6363, NZD/JPY stronger to ¥79.49, and GBP/NZD lower to NZ$ 1.9185. PM Key talked about the recent contaminated milk scare with the NZ looking for Chinese and Russian import interest to return. The July performance service index rallied to 58.1 and Q2 producer prices data were mixed with outputs at +1.0% q/q. RBNZ tomorrow releases its Q3 2-year inflation expectation forecast.

The Japanese yen was mostly weaker against rivals through the early European session with USD/JPY testing ¥97.84 and GBP/JPY higher to ¥152.86. Some weak Japanese prints overnight saw July merchandise trade sharply weaken to ¥1.024 trillion with a +12.2% climb in exports offset by a large 19.6% y/y gain in imports. Also, both the June coincident index and leading index notched marginal gains. June all-industry numbers are due tomorrow along with July department store sales followed by July machine tool orders on Thursday.

The Euro depreciated against its peers through the early European session with EUR/USD testing US$ 1.3314, EUR/GBP weaker to £0.8521, and EUR/CHF reaching CHF 1.2363. There are no major Eurozone data scheduled for today and traders await ECB monthly report, tomorrow’s German July producer prices and Eurozone construction output, Thursday’s Eurozone PMI numbers, and Eurozone consumer confidence on Friday along with German GDP revisions.

Crude Oil tried to sustain last week’s move above the US$ 110 level with Brent reaching $110.33 before testing the $ 109.73 area and then finding a bid higher. Many oil forecasters are predicting cheaper oil in H2 with some predicting WTI below $95 in Q4. Other predictions have the WTI-Brent spread widening to as much as US$ 6 by the end of the year. Relatively strong supply is expected to keep WTI from gaining too much with recent improvements in Canada’s output issues and U.S. facilities expected to remain productive.