Aus CPI to Shape RBA's Decision

AUD

The Aussie Dollar opens up lower against all the majors as the uncertainty around the effectiveness of China’s newly introduced stimulus keeps downward pressure on the AUD. Asian equities finished the session mixed, the NIKKEI +0.8%, HANG SENG +0.5%, SHENZEN -1% and the ASX +0.3%. Australia’s two main commodities, Iron Ore and Copper both ended the day relatively flat. There was no major news out of Australia or China yesterday, however, we have a big day at home today with CPI figures coming out this morning which are expected to decrease to 2.4% y/y down from 2.7% y/y last month. This is going to be a big data point for the RBA leading up to their rate decision next Tuesday where they are currently expected to hold the Cash Rate at 4.35%.
 

USD

The AUDUSD pair opens up lower yet again at 0.6558 as the USD strengthens ahead of the Presidential election next Tuesday. Wall St finished the day mixed with the DOW JONES -0.3%, S&P 500 +0.4 AND NASDAQ +0.9%. Overnight, the US had their Job Openings figures which came under expectations at 7.443M. The main talking points for the week are Core PCE on Thursday and Non-Farm Payrolls on Friday which will all shape the Fed’s outlook and rate decision next week on Friday. The presidential election is also shaping markets with the possibility of Trump winning which is further strengthening the USD. Lots of big news coming out over the next 2 weeks with the possibility to see lots of volatility in the AUDUSD pairing.
 

EUR

The AUDEUR pairing opens lower at 0.6065 ahead of a heavy data week out of the Eurozone. European equities both finished the day down with DAX -0.3% and CAC -0.6%. Yesterday, Germany had their GfK Consumer Climate Indicator which rose to -18.3 which was its highest reading since April 2022 showing an increased consumer sentiment in Europe’s largest economy. Europe’s main economies have their flash GDP figures coming out this evening ahead of tomorrow’s Euro Area flash Inflation rate figure which is expected to increase to 1.9% from 1.7%.
 

GBP

The AUDGBP opens lower at 0.5039 after the Pound gains ahead of the UK Autumn Forecast Statement that will be released tonight. This will be the first budget announcement by a Labor government in over 15 years. The FTSE closed the day down at -0.8%. Eyes are now all on next week as the BoE has their interest rate decision where they are expected to decrease by 25 basis points to 4.75%.
 

NZD

The AUDNZD pair opened lower at 1.0985 ahead of ANZ Business Confidence figures on Thursday. The RBNZ has their final policy meeting of the year next month where it is widely expected that they will deliver another 50-basis point rate cut. Markets are even considering the possibility of a sizeable 75 bps cut.