Data:
- GBP CPI y/y: exp. 3.2%
- CAD CPI m/m: prev. 0.2%
AUDUSD Day’s Range: 0.73787 – 0.74857
Evergrande made their onshore bond payment, bringing in the positive risk appetite to China for at least one session. The AUD and NZD rallied towards the 0.7500 handle due to the change of risk appetite. Chinese Yuan strengthened to its strongest level since June this year, indicating a risk-on move in the Asia Pacific Region. USD weakened against most peers as traders expect the central banks around the world to raise the interest rate before the Federal Reserve.
The RBA meeting minutes yesterday had a massive impact on AUD. The minute sounded relatively hawkish. AUDUSD rose almost 1% to a high of 0.7445 after the American session digested the information, which was about 3.85% above the lowest level this year. The rise was also supported by a change in risk appetite but that was not the catalyst that started the bounce. RBA remained committed to maintaining high supportive monetary conditions to achieve a return of full employment and actual inflation within the 2 – 3% range. RBA will not increase the rate until the condition is met. The reopening is likely to bring an increase in economic activity and consumer spending.
U.S. stocks extended their rally on Tuesday as a solid corporate result eases concerns from rising inflation. The fifth day of gains brings the benchmark index within half a percent of an all-time high as the market price in the prospect of tighter monetary policy. Investors should keep an eye on the company earnings for this session as inflation, labour, supply, and currency risks are settled in and to see whether higher costs could reduce corporate margins.
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AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.74%, closed at 4519.63
- The Nasdaq 100 dropped 0.01%, closed at 15396.75
- The Dow Jones Industrial Average rose 0.56%, closed at 35457.31
- S&P/ASX 200 dropped 0.08%, closed at 7374.90
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.2% to $1.1635
- The British pound rose 0.5% to $1.3792
- The Japanese yen was little changed at 114.34 per dollar
Bonds
- The yield on 10-year Treasuries advanced four basis points to 1.64%
- Germany’s 10-year yield advanced four basis points to -0.11%
- Britain’s 10-year yield advanced three basis points to 1.17%
Commodities
- Brent crude oil was at USD/Bbl 82.98
- Gold was at USD/OZ 1769.65
- Iron ore was at USD/T 123.30