Data:
Wednesday
- USD Core Retail Sales Oct: exp. 1.0% vs.1.7%
- USD Retail Sales Oct: exp. 1.3% vs. 1.7%
- USD Industrial Production Oct: exp. 0.9% vs. 1.6%
- USD FOMC Members Barkin, Bostic & Daly Speaks
- AUD Wage Price Index Q3: exp. 0.6%
AUDUSD Day’s Range: 0.72922 – 0.73682
DXY rallied to its highest level since July 2020 on the back of positive U.S. data. U.S. retail sales surged in October due to the early start of holiday shopping in the USA, as people try to avoid empty shelves amid a shortage of some goods because of the pandemic. Stocks advanced after the release as well. Retail sales increased 1.7% last month, well above the market estimate of 1.2%. It was the largest gain since March after rising 0.8% in September. Sales soared 16.3% year-on-year in October and are 21.4% above their pre-pandemic level. Further, the big increase in sales in October also suggests a higher price as the monthly consumer prices rise 0.9% in October. Federal officials said high inflation can affect U.S. households and consumer sentiment and Fed wants to get it under control. St. Louis Fed President James Bullard said the Fed should ‘tack a more hawkish direction’ over its next couple of meeting to be prepared in case inflation does not ease. USDCNH broke to the lowest level since June 2021 before rebounding later in the session.
Back to Australia, the RBA seems to keep their current policy path although inflation risk is still rising, the central bank is prepared to remain patient and wait until 2024 to increase the rate for now. The AUDUSD was muted on the release of the minutes. The US-China meeting remains as a headline and it seems that the relationship between the two countries may be shifting positively slightly.
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AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.39%, closed at 4700.90
- The Nasdaq 100 gained 0.66%, closed at 16294.25
- The Dow Jones Industrial Average rose 0.15%, closed at 36142.22
- S&P/ASX 200 dropped 0.67%, closed at 7420.40
Currencies
- The Bloomberg Dollar Spot Index rose 0.4%
- The euro fell 0.5% to $1.1313
- The British pound was little changed at $1.3423
- The Japanese yen fell 0.6% to 114.81 per dollar
Bonds
- The yield on 10-year Treasuries advanced two basis points to 1.64%
- Germany’s 10-year yield declined one basis point to -0.24%
- Britain’s 10-year yield advanced three basis points to 0.99%
Commodities
- Brent crude oil was at USD/Bbl 82.40
- Gold was at USD/OZ 1850.48
- Iron ore was at USD/T 92.01