AUD/USD Fundamental Forecast – September 6, 2016

The AUD/USD rallied in Monday’s session after a solid print of Chinese services PMI and a jump domestic company profits. Profits soared to 6.9% and Chinese Caixin services PMI jumped to 52.1 against expectations of 52.1. The Aussie gained 21 points to 0.7594. Markets are expected to remain quiet for the balance of the day with world leaders in China for the G20 summit and the US and Canada closed for national holiday.

With the G20 the main focus of the markets this morning comments from world leaders remain in the headlines. Australian Prime Minister Malcolm Turnbull said on Monday he wants to negotiate a “very strong” free trade agreement with Britain after it leaves the European Union.

Britain’s June decision to leave the 28-country EU sent financial markets into shock in anticipation of a recession as Britain enters a years-long process of tearing itself away from its biggest trading partner and forging a new global economic role.

Britain’s economy will suffer as a result of the decision despite signs in recent data that the impact has not been as severe as some predicted, Prime Minister Theresa May said on Sunday on her way to the G20 summit in the eastern Chinese city of Hangzhou.

China hopes Australia can provide a fair and transparent environment for foreign investors, President Xi Jinping said on Sunday, as he met Australian Prime Minister Malcolm Turnbull for the first time since Canberra blocked a major deal.

Australia angered China last month after Turnbull’s government stopped the A$10 billion ($7.57 billion) sale of the country’s biggest energy grid to Chinese bidders after they failed to overcome security concerns.

After a meeting on the sidelines of a G20 summit in the eastern Chinese city of Hangzhou, Xi said China “hopes the Australian side continues to dedicate itself to providing foreign investors a fair, transparent and predictable policy environment.”

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 September 6, 2016

Government Bond Auctions

Date Time Country Auction

Sep 06 11:00 Austria Holds bond auction

Sep 06 11:30 UK 1.5% 2026 Gilt

Sep 06 11:30 Germany Holds I/L bond auction

Sep 07 10:30 Denmark Holds bond auction

Sep 07 11:03 Sweden Holds bond auction

Sep 07 11:30 Germany Eur 5bn 0% Aug 2026 Bund

Sep 08 11:00 Ireland Holds bond auction

Sep 08 17:20 Italy Announces details of bond auction