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We’re starting to see mixed price action! Does this mean that the post-USMCA deal afterglow starting to fade?

  • China’s still markets out on a holiday
  • NZIER business confidence dips from -20 to -30 in Q3 2018
  • RBA keeps rates at 1.50% as expected in October
  • Japan’s consumer confidence improves from 43.3 to 43.4 in September

Major Events/Reports:

RBA keeps maintains rates at 1.50%

As widely expected, the Reserve Bank of Australia (RBA) maintained its interest rates at a record low of 1.50% for another month in October. That’s the 26th month in a row, yo!

As in their previous statement, RBA members still believe that growth rate will be above 3.0% in 2018 and 2019. However, unemployment and inflation levels have yet to hit the central bank’s comfort levels as they’re still expected to improve “gradually.”

Meanwhile, RBA has noted the Aussie’s depreciation against major currencies but maintains that it’s “within the range that it has been” in more than two years. Last but not the least, household consumption remains a source of uncertainty for the members.

Overall, no surprises from the RBA. The lack of game-changing statements might have helped support the Aussie during the trading session.

Mixed risk sentiment

After partying over the newly-minted USMCA deal, some investors are getting back on their desks and pricing in the results of the U.S.’ trade conflicts with its partners.

Analysts cite recent manufacturing reports from China and the euro zone, which are starting to show weaker activity and global demand. Hang Seng, which was out on a holiday yesterday, caught up to the uncertainty today.

  • Nikkei is up by 0.27% to 24,311.7
  • A SX 200 is down by 0.83% to 6,119.5
  • Hang Seng is down by 1.64% to 27,333.7

Commodity prices were a bit more coordinated, with gold taking advantage of a bit of dollar weakness while crude oil continued to find support from pre-Iran sanctions jitters.

  • Gold is up by 0.21% to $1,191.40 per troy ounce
  • Brent crude oil is up by 0.07% to $85.00 per barrel
  • U.S. WTI is up by 0.05% to $75.49 per barrel

Major Market Mover(s):

AUD

The high-yielding Aussie still made pips rain as Hong Kong traders caught up to positive headlines from the weekend. Of course, it also helped that the RBA kept its policies steady for another month despite the Aussie’s recent weakness.

AUD/USD is up by 9 pips (+0.12%) to .7229; AUD/JPY is up by 12 pips (+0.15%) to 82.37; EUR/AUD is down by 19 pips (-0.12%) to 1.6006; GBP/AUD is down by 13 pips (-0.07%) to 1.8034, AUD/NZD is up by 31 pips (+0.28%) to 1.0939, and AUD/CHF is up by 12 pips (+0.17%) to .7115.

CAD

The oil-related Loonie continued to gain support from positioning ahead of the Iran sanctions scheduled to take effect in November.

USD/CAD is down by 9 pips (-0.07%) to 1.2803; CAD/JPY is up by 10 pips (+0.11%) to 88.99; GBP/CAD is down by 18 pips (-0.11%) to 1.6691; EUR/CAD is down by 20 pips (-0.13%) to 1.4814, and CAD/CHF is up by 12 pips (+0.15%) to .7687.

NZD

The Kiwi took some hits after a quarterly business survey from New Zealand printed weaker results and hinted at weaker economic activity in the next quarter.

NZD/USD is down by 9 pips (-0.13%) to .6608; GBP/NZD is up by 27 pips (+0.14%) to 1.9728; NZD/JPY us down by 7 pips (-0.09%) to 75.29, and EUR/NZD is down by 17 pips (-0.10%) to 1.7510.

Watch Out For:

  • 6:00 am GMT: U.K.’s Nationwide house price index (0.2% expected, -0.5% previous)
  • 6:30 am GMT: AU commodity prices (y/y)
  • 7:00 am GMT: Spain’s unemployment change (28.2K expected, 47.0K previous)
  • 8:30 am GMT: U.K.’s construction PMI (52.8 expected, 52.9 previous)
  • 9:00 am GMT: Euro Zone’s PPI (0.2% expected, 0.4% previous)