Data
Monday
- No real impactful data
Tuesday
- JPY BOJ Core CPI y/y: exp. 0.3% vs. 0.6%
Wednesday
- USD CB Consumer Confidence: exp. 108.4 vs. 113.8
- USD Richmond Manufacturing Index: exp. 4 vs. 12
- AUD CPI q/q: exp. 0.8% vs. 0.8%
- AUD Trimmed Mean CPI q/q: exp. 0.5% vs.0.7%
Thursday
- CAD BOC Monetary Policy Report
- CAD BOC Rate Statement
- CAD Overnight Rate: exp. 0.25% vs. 0.25%
- CAD BOC Press Conference
- AUD RBA Deputy Gov Debelle Speaks
- AUD Import prices q/q: exp. 3.4% vs. 5.4%
- JPY Monetary Policy Statement & BOJ Outlook Report
- EUR Monetary Policy Statement
- USD Advance GDP q/q: exp. 2.6% vs. 2.0%
- USD Unemployment Claims: exp. 290K vs. 281K
Friday
- AUD Retail Sales m/m: exp. 0.3%
- CAD GDP m/m: exp. 0.7%
- USD Core PCE Price Index m/m: exp. 0.2%
Saturday
- USD Treasury Currency Report
AUDUSD Day’s Range: 0.74796 – 0.75558
The Australian trimmed Q3 inflation (inflation excluding most volatile 30% of items) comes better than market expectation on Wednesday. The seasonal adjusted U.S. employment initial claim for the week ending 23rd Oct was 281,000, a decrease of 10,000 from the previous week’s level and it is the lowest level since 14th March 2020. RBA decided to defend its yield curve target on the April 2024 bond. RBA Ast. Gov. Debelle mentioned yesterday that little more inflation is welcome but a lot more inflation is not desired. Australia’s export index rose 6.2% this quarter and 41.0% for this year while the import price index rose 5.4% this quarter and 6.4% throughout this year. The U.S. and Australian 10-year Treasury bond yield spread increased to 37.6 b.p., the highest level since February.
The pace of global recovery and rising inflation remains as headlines. AUDUSD railed on the back of the worse than expected U.S. GDP (USD Advance GDP q/q: exp. 2.6% vs. 2.0%). The U.S. economy grew at its slowest pace in more than a year in the third quarter due to the worsening supply chain shortage caused by the resurgence in Covid-19. Shortage of goods such as automobiles reduces consumer spending. The pending home sales index decreased 2.3% last month to 116.7. ECB’s President Lagarde acknowledged that inflation will be higher for an even longer period but disagree with the opinion that price pressure will cause an interest rate hike as soon as next year. Lagarde remained her view that inflation is still temporary so policy response would be premature.
AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.98% , closed at 4596.42
- The Nasdaq 100 dropped 0.51%, closed at 15684.75
- The Dow Jones Industrial Average rose 0.68%, closed at 35730.48
- S&P/ASX 200 dropped 0.25%, closed at 7430.40
Currencies
- The Bloomberg Dollar Spot Index fell 0.4%
- The euro rose 0.7% to $1.1679
- The British pound rose 0.3% to $1.3789
- The Japanese yen rose 0.2% to 113.58 per dollar
Bonds
- The yield on 10-year Treasuries advanced three basis points to 1.57%
- Germany’s 10-year yield advanced four basis points to -0.14%
- Britain’s 10-year yield advanced two basis points to 1.01%
Commodities
- Brent crude oil was at USD/Bbl 82.90
- Gold was at USD/OZ 1800.05
- Iron ore was at USD/T 121.94