Aussie Dollar Holds Steady as RBA Poised to Hike Rates
AUD
The Aussie Dollar continues to trade sideways against the majors as all eyes turn to todays RBA cash rate decision. A rate hike is seen as a sure thing by markets with a 25bp hike already priced in, the commentary following will be of note to see if the board provides any insight on if further hikes will be necessary. Asian equities ended mixed yesterday with the Hang Seng +.5%, Nikkei -.7% and the Shenzhen trading -2.2%. Locally the ASX 200 climbed +.2% as healthcare and utilities sectors outperformed at +1.5% and +1.2%. Tomorrow will see the release of Australia's CPI inflation data, with CPI m/m currently forecasted at +0.5% (prev 1.0%), CPI y/y expected at +4.1% (prev 3.5%) and Trimmed Mean CPI m/m expected at +0.3%
USD
AUDUSD opens flat at 0.7018 this morning as market sentiment deteriorates amid fading US-Iran peace hopes. On Wall St. the Nasdaq closed -0.8%, the S&P 500 -0.7%, and the Dow Jones -0.6%. U.S. 10-year yields hit 20-year highs when rising 8bps to 5.24%, while Brent Crude rose 1.3% to $105.70 a barrel. A quiet day for data out of the US yesterday, however later this evening will see the release of JOLTS Job Openings and CB Consumer Confidence. Job openings are currently expected at 7.23M from a previous 7.27M and Consumer confidence is set to remain steady at 89.2 (prev 89.4).
EUR
AUDEUR trades sideways overnight to open at a rate of 0.6171.European equities closed largely flat as well, with the DAX at -0.1% and the CAC coming in flat. Late last night, ECB President Lagarde testified before the Committee on Economic and Monetary Affairs of the European Parliament, she noted that risks were skewed towards higher inflation and there was also a risk in governments offering generous subsidies to help shield consumers against higher energy costs. She is set to speak again later tonight at the ECB/European System of Central Banks Legal Conference.
GBP
AUDGBP opens slightly lower this morning at 0.5295, just falling under the 0.53 handle. The cross is steady and remains rangebound into today's RBA rate decision, as both the RBA and BoE are running restrictive settings. UK equities pushed higher overnight, with the FTSE 100 closing up +0.4%. The UK economic calendar is quiet, with no major news expected for the Pound until the Bank of England MPC decision on Thursday, 5 November at ~11:00pm AEST where the Bank Rate currently sits at 3.75%, markets are pricing in around an 80% chance of a hike.
NZD
AUDNZD opens flat this morning at a rate of 1.2383 following a dry spell of economic data out of New Zealand. Some minor data out tomorrow with the release of the ANZ Business Confidence survey.