Markets Sheepish Ahead of RBA Rate Decision
AUD
The Aussie Dollar opens lower against the majors this morning as markets brace for upcoming RBA rate decision. Asian equities were mixed to start the week, Shenzhen +0.8%, Nikkei +0.2% and Hang Seng -1.2%. Locally the ASX 200 finished -0.1% lower as utilities and materials lead losses at -0.9% and -0.8%. Commodities on the other hand close all in the red. All eyes will be focused on today’s RBA cash rate decision and press conference where it is expected the RBA Board to keep the cash rate target unchanged at 3.60% today. Which is in line with market forecasts and puts the chances of a rate move at close to zero. Clearer signs that private demand is strengthening and inflation is elevated are likely to see the Board express concerns about upside risks to inflation. It is also expected for Governor Bullock to provide a more hawkish tone during today’s commentary with the market now pricing in a 25bp rate hike by around August 2026.
USD
The AUDUSD coupling opens slightly lower this morning at 0.6624 after the US dollar firms on expectations of limited Fed easing. US equities also saw a soft start to the week with both the Dow Jones, and S&P 500 -0.6%, while the Nasdaq closed -0.4%. Looking at US news releases it will be a key week with job openings data scheduled for release tonight, and will likely influence perceptions of the labour market. This report will include data from both the September and October surveys. In August, job openings rose modestly to 7.23 million, with notable declines observed in the construction and federal government sectors. We will also see the Feds rate decision early Thursday morning where an interest rate cut of 25bps is all but priced in, but investors braced for signals of a milder easing cycle than expected.
EUR
AUDEUR loses its 0.57 handle opening lower this morning at 0.5691 after German Industrial Production m/m came through much higher than forecast at 1.8% from 0.2%. Eurozone equities closed mixed with the DAX +0.1%, while the CAC -0.1%. Not much this week in terms of news for the Eurozone with German Trade Balance, German Buba President Nagel Speaks set for release later this evening, with the main event this week being ECB President Lagarde Speaking tomorrow night.
GBP
AUDGBP opens lower this morning at 0.4971 after what was an uneventful day, with only the Bank of England’s Taylor mentioning Wage inflation and services inflation is coming down. UK Equities closed in the red with the FTSE -0.2%. Nothing major set for release out of the UK today with only BRC Retail Sales Monitor y/y, however overnight there will be the Monetary Policy Report Hearings with the main event this week being their GDP m/m.
NZD
AUDNZD opens lower this morning at 1.1463 after what was a quiet day from our Kiwi neighbours with no news to note. Nothing set for release today, however tomorrow RBNZ Gov Breman will be speaking in Wellington where audience questions will be expected.