US Disinflation Progress Back in Focus Tonight
AUD
The Aussie dollar continues its downward trend, opening lower this morning against most majors apart from the NZD and JPY amid disappointment in China’s follow-up to last month’s stimulus measures, with worries about diminished demand from China being a theme driving markets so far all month. Commodities saw a mixed close with Gold flat, Silver +0.3%, Iron Ore +1.0%, and Copper -1.1%. Asian equities also ended largely mixed again with, the Nikkei +0.9%, Shanghai Comp -6.6% and Shenzhen -7.1%. Locally the ASX closed a modest +0.1% as info tech, and communication services led gains. No major news set for release locally today with MI Inflation Expectations at 11:00am, and RBA Assist Gov Hunter Speaking later in the evening at 6:45pm. There may also be some data released out of China with their New Loans set as a tentative between the 10th-15th.
USD
The AUDUSD coupling opens lower this morning at 0.6715 with the USD strengthening to two-month highs after taking in stride the release of minutes from the Federal Reserve's September meeting that showed a substantial majority of policymakers backed its outsized 50-basis point rate cut. Wall St. also saw a boost closing in the green with the Dow Jones +1.0%, the S&P 500 +0.8%, and the Nasdaq +0.6%. Another busy night for the US with all eyes focused on the CPI releases with US CPI for September expected to continue the recent reassuring trend of disinflation observed in past months. Any bumps in the road to further disinflation in the data tonight is sure to influence the expectations surrounding the monetary policy in the upcoming months. Unemployment Claims will also be released with claims expected to increase slightly from 225K to 231K.
EUR
The AUDEUR opens this morning slightly lower at 0.6135 after a couple of quiet consecutive session, last night's German Trade Balance came through much higher than forecast but failed to have meaningful impact on the rate. Eurozone equities closed in the green with the DAX +1.0%, and the CAC +0.5%. It will be a quiet rest of the week for Eurozone releases with nothing major set today with only Italian Industrial Production m/m, and ECB Monetary Policy Meeting Accounts later this evening.
GBP
The AUDGBP coupling has trailed off pretty steadily over the last 24 hours, opening slightly higher this morning at 0.5135. Looking at UK equities the FTSE closed in the green up 0.6%. Another quiet day today for the UK with only RICS House Price Balance set for release later this morning, followed by BOE Credit Conditions Survey later this evening. All eyes however will be focused on the release of their GDP m/m tomorrow afternoon forecasted to increase to 0.2%.
NZD
The AUDNZD opens higher this morning at 1.1074 after the Reserve Bank of New Zealand slashed half a percentage point from the official cash rate and claimed victory in achieving its inflation mandate. The seven-person Monetary Policy Committee chose to cut the benchmark interest rate from 5.25% to 4.75% after meeting on Wednesday. In a statement, they said annual inflation was now within the target range and was "converging on the 2% midpoint". No news from our Kiwi neighbours today, however tomorrow we will see their BusinessNZ Manufacturing Index, FPI m/m, and Visitor Arrivals m/m to end the week.