RBA Reinforces Hawkish Tone

AUD

The Aussie Dollar is holding strong this morning, having absorbed yesterday's RBA decision and is now eyeing global drivers. As expected, the RBA held rates at 3.60%, but the important news was their clear hawkish tone in the statement, signaling that the risks to inflation have tilted to the upside, which keeps the possibility of a rate hike in 2026 alive and provides support for the AUD. The ASX 200 dropped 0.5% lower as technology and healthcare shed -1.3% and -0.9% respectively, a mixed session for Asian equities saw the Hang Seng trade -1.3%, Shenzhen -0.5% and Nikkei up +0.1%. Domestically, today we have no data to be released with all eyes to tomorrow for our unemployment data expected to go from 4.3% up to 4.4%. China will release their CPI y/y and PPI y/y today.
 

USD

The AUD/USD opens higher at 0.6641, a subdued session ahead of tomorrow’s FOMC meeting saw the Dow Jones trading -0.2%, the Nasdaq +0.2%, and the S&P 500 unchanged entering the final hours of the day. The JOLTS Job Openings report came in well above forecast, challenging the view that the US labour market is cooling fast, though had little to no impact on the currency due to it being a September reading. However, all eyes are now on the FOMC decision tonight at 5:00 am AEDT. The market is pricing in a 25-basis point rate cut, but the consensus expects a "hawkish cut"—meaning the Fed will likely cut rates but use the accompanying statement to signal a cautious, gradual path for future cuts, essentially pushing back hard on expectations for rapid easing in 2026.
 

EUR

The AUD/EUR is opening up at 0.5711 and continues to trade well, supported by the AUD's positive momentum. European indices finished the down mostly weaker, Stoxx -0.1%, CAC -0.7% and DAX +0.5%. Today we look for ECB President Christine Lagarde speech to give any indicator on the ECB future direction. Later in the week, we will see German CPI m/m and French CPI m/m.
 

GBP

The AUD/GBP opens higher at 0.4993, breaking out of its recent tight consolidation range. The FTSE closed flat. We saw the Monetary Policy Report Hearings overnight, during these hearings the BOE Governor and several MPC members testify on inflation and the economic outlook before Parliament's Treasury Committee.
 

NZD

The AUD/NZD opens very slightly up at 1.1492. This move is highly sensitive to the economic divergence between the two countries, with the AUD currently backed by a more hawkish central bank outlook. No data out today but tomorrow will see Manufacturing Sales q/q