Market Watch AU – 6th December 2023
The Reserve Bank of Australia (RBA) surprised markets yesterday with a seemingly less hawkish stance on the outlook for rates at their meeting. While markets had expected the central bank to stand pat for rates for the December meeting, they were not expecting the removal of the wording “inflation is still too high” and added comment to the fact that they mentioned that monthly CPI has slowed down, as part of their accompanying statement. The AUDUSD has dropped 1% on the interpretation and starts the Asia session with a bearish tilt, particularly as the US-dollar recovers following a stronger than expected ISM services PMI data release. US Non-Farm Payrolls will be keenly watched for markets to continue to shape their expectations for no more rate hikes and non-recessionary rate cuts next year. Australia gets a look at the release of Q3 GDP today, with market expecting +1.9% YoY and +0.5% for the quarter. The AUDUSD is on the back foot again and will be looking for support around 0.6520/30 while recovery above the 0.66-cent level could negate further downside trend.
Wall Street indices were mixed after a choppy session for stocks, after fresh US data re-enforced the investor notion that the Fed maybe done with rate hikes and even considering a rate cut by mid next year. The DJI was down -0.2%, the S&P500 lost -0.1% and the Nasdaq gained +0.1%. Australian shares look to advance today after the RBA decision to hold on rates yesterday was in line with market expectations.
Gold prices retreated further as investors recycled back to the US-dollar ahead of the US Jobs data later in the week.
Copper prices fell 1.4% following ratings agency Moody’s cut to its China credit rating, from stable to negative, as well as a lift in LME warehouse inventories. Iron Ore futures on the Dalian exchange declined for the day, as traders remain wary of the Beijing authority’s supervision of pricing to ensure price stability.
Brent Crude Oil prices dropped -0.7% on the tail of a stronger US-dollar, offsetting supply concerns after Russia stated that OPEC+ was ready to deepen production cuts into Q1 next year.
| AUDUSD
Open today 0.6552 Yesterday’s Range 0.6544 / 0.6623 |
NZDUSD
Open today 0.6129 Yesterday’s Range 0.6126 / 0.6274 |
AUDNZD
Yesterday’s Range 1.0680 / 1.0748 |
| AUDEUR
Yesterday’s Range 0.6066 / 0.6113 |
AUDCNH
Yesterday’s Range 4.6899 / 4.7350 |
AUDGBP
Yesterday’s Range 0.5191 / 0.5243 |
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