Data:
Monday
- BOE Gov Bailey Speaks
- NZD CPI q/q: exp.1.5% vs. 2.2%
- CNY GDP q/y: exp. 5.0%
- CNY Retail Sales y/y: exp. 3.5%
Tuesday
- USD Industrial Production m/m: 0.3%
- AUD Monetary Policy Meeting Minutes
Wednesday
- GBP CPI y/y: exp. 3.2%
- CAD CPI m/m: prev. 0.2%
Thursday
- USD Crude Oil Inventories: exp. 6.1M
- USD Philly Fed Manufacturing Index: exp. 24.3
- USD Unemployment Claims: exp. 298K
Friday
- AUD Gov Lowes Speaks
- GBP Retail Sales m/m: exp. 0.7%
- EUR German Flash Manufacturing PMI: exp. 54.3
- EUR German Flash Service PMI: exp. 55.2
- EUR Flash Manufacturing PMI: exp. 55.6
- EUR Flash Service PMI: exp. 54.5
Saturday:
- USD Flash Manufacturing PMI: exp. 60.5
- USD Flash Service PMI: 55.3
- USD Treasury Currency Report
AUDUSD Day’s Range: 0.74035 – 0.74339
We got another week full of data, with Tier 1 data from China releasing later today, AUD Monetary Policy meeting minutes on Tuesday, and some Purchasing Managers’ Index (PMI) from European counties. China’s third quarter GDP will be closely watched to gauge the severity of the electricity shortage.
Economists said investors should prepare for increased market volatility if the Federal Reserve reduces the stimulus plan. The rising inflation and supply chain shortage may only be partly transitory and may continue for another year.
Several developing countries’ currencies fell to the weakest level since March 2020 relative to average local-bond yields, suggesting investors are weighing the concerns over global growth and faster inflation instead of the rising interest rates. Central banks noticed that rate increase alone is not enough to attract investors when there is uncertainty in growth.
China Evergrande Group’s debt crisis is unlikely to cause a financial crisis given the low exposure of local banks to Evergrande and Chinese regulators that has the ability to control the market. Evergrande’s problem will slow the growth of China, but the impact will be limited, easing investors’ concern that Evergrande will have a serious impact on the performance of AUD.
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AUDUSD Daily Chart:
Major moves in the market:
Stocks
- The S&P 500 rose 0.75%, closed at 4471.37
- The Nasdaq Composite rose 0.50%, closed at 14897.37
- S&P/ASX 200 Index rose 0.69%, closed at 7362.00
Currencies
- The Japanese yen was at 114.33 per dollar, down 0.1%
- The offshore yuan was at 6.4337 per dollar
- The Bloomberg Dollar Spot Index fell 0.1%
- The euro was at $1.1603
Bonds
- The yield on 10-year Treasuries advanced six basis points to 1.57%
- Australia’s 10-year government bond yield jumped about nine basis points to 1.74%
Commodities
- Brent crude oil was at USD/Bbl 82.28
- Gold was at USD/OZ 1767.23
- Iron ore was at USD/T 123.19