Global Markets:
- Asian stock markets: Nikkei up 0.80 %, Hang Seng rose 0.05 %, ASX 200 down 0.20 %, Shanghai Composite closed
- Commodities: Gold at $1312 (-0.05 %), Silver at $18.86 (-0.05 %), WTI Oil at $48.55 (-0.50 %), Brent Oil at $50.70 (-0.30 %)
- Rates: US 10 year yield at 1.63, UK 10 year yield at 0.73, German 10 year yield at -0.10
News & Data:
- Australia RBA Cash Rate Target Oct: 1.50% (est. 1.50%, prev. 1.50%)
- Australia ANZ Roy Morgan Weekly Consumer Confidence Index 2-Oct: 117.9 (prev. 120.6)
- Australia Building Approvals (MoM) Aug: -1.8% (est. -6.00%, prev. 11.30%)
- Australia Building Approvals (YoY) Aug: 10.1% (est. 5.10%, prev. 3.10%)
- Japan Monetary Base (YoY) Sep: 22.7% (prev. 24.20%)
- NZ NZIER Business Confidence Q3: 26% (prev. 19%)
- NZ QV House Prices (YoY) Sep: 14.3% (prev. 14.60%)
- Fed's Mester: All meetings live, including November; expects case to be compelling for a hike
RBA Statement:
- Says global economy growing at lower than average pace
- RBA says judged steady rate consistent with growth, inflation targets
- Says pace of China growth appears to be moderating
- Rising AUD could complicate economic adjustment
- Inflation expected to remain low for some time
- Australian economy growing at moderate rate
- Labour market data mixed, sees continued growth in employment
- Inflation expected to remain low for some time
- Lenders taking more cautious attitude to housing
- Large decline in mining investment being offset by growth in other areas
- Household consumption growing at reasonable pace but appears to have slowed recently
Markets Update:
The RBA kept its main rate unchanged at 1.50 %, as expected by the market. There were no surprises in the statement either, so the reaction in the Australian Dollar was muted. AUD/USD fell from 0.7680 to 0.7660, and is currently down 0.05 % on the day. The RBA warned again that a rise in the AUD could complicate economic adjustment, but the market ignored that, as usually.
NZD/USD rose to a high of 0.7310 overnight, but ran out of momentum there and fell back to 0.7285 later in the session. USD/CAD rose from 1.3110 to 1.3135, as oil prices weakened slightly.
USD/JPY rallied above 102.00 and made it to 102.40, following strong US PMI data yesterday. The pair retraced to 102.10 later in the session, but the break above 102.20 resistance suggests that further gains are ahead, with the next major resistance area now at 103.00-30.
EUR/USD traded in a 1.1195-1.1215 range overnight, while GBP/USD consolidated between 1.2815 and 1.2860. The Pound has come under pressure again, following the announcement by the UK government that it will trigger Article 50, which will start negotiations with the EU regarding the UK's exit from the union, in March of next year.
Upcoming Events:
- 09:30 BST – UK Construction PMI
- 13:05 BST – FOMC Member Lacker speaks
