Data:
Wednesday
- NZD Employment Change Q3: exp. 0.4% vs. 2.0%
- NZD Unemployment rate: exp. 3.9% vs. 3.4%
- CNY Caixin Service PMI: exp. 53.6
- USD ADP Non-Farm Employment Change
AUDUSD Day’s Range: 0.74203 – 0.75323
The RBA meeting yesterday announced that the RBA will remain the cash rate at 0.10% but abandon yield curve control. Also, asset purchases will remain at A$4 billion per week until February 202. RBA Governor Lowe said the central bank will be patient on rates and they believe the recent data does not support a rate hike in 2022. Lowe said that it is very possible that the rate will not increase until 2024, but he also acknowledged that a rate hike in 2023 would be acceptable. The AUDUSD was under the pressure of commodity prices, with iron ore being sold off sharply in the future markets due to China’s steel production curbs. AUDUSD dropped dramatically after the RBA meeting.
Major U.S. stock benchmark rallied to their all-time high ahead of tomorrow’s Federal Reserve policy decision. Profit margins have held up well and supported the rally despite soaring commodity prices and supply-chain shortages. However, technical indicators are signaling heightened volatility. S&P 500 continues to push the limit and widen its upper and lower bands, which can be a precursor to greater swings. A survey shows that economists expect the U.S. policymakers expected to start reducing their asset-purchase program and see the first-rate hike in early 2023.
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AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.37% , closed at 4630.65
- The Nasdaq 100 dropped 0.08%, closed at 15948.75
- The Dow Jones Industrial Average rose 0.39%, closed at 36052.63
- S&P/ASX 200 dropped 0.63%, closed at 7324.30
Currencies
- The Bloomberg Dollar Spot Index rose 0.2%
- The euro fell 0.2% to $1.1581
- The British pound fell 0.4% to $1.3616
- The Japanese yen was little changed at 113.95 per dollar
Bonds
- The yield on 10-year Treasuries declined two basis points to 1.54%
- Germany’s 10-year yield declined six basis points to -0.16%
- Britain’s 10-year yield declined two basis points to 1.04%
Commodities
- Brent crude oil was at USD/Bbl 82.90
- Gold was at USD/OZ 1787.90
- Iron ore was at USD/T 99.40