Compass Global Markets' Blog

Market Update - 4th October 2017 - AUD Falls Then Rebounds On RBA Announcement Yesterday

Posted by Patrick Downes on October 4, 2017 at 8:51 AM

An error in my report yesterday. I suggested the RBA may move rates higher to contain the AUD and rising inflation around the world. However raising rates will of course make the AUD more desirable to investors so that can't be a factor. Higher rates typically lead to a higher Aussie and vice versa. AUD/USD initially fell on the RBA announcement of no change to rates testing the 0.77's while their commentary provided no new information, which suggests any rate hike is still a way off; mortgage holders can sit tight for the time being. AUD/USD is also sitting tight around the 0.78's

Base metals and stocks performed well overnight with Zinc the flavour of the month and likely to continue to outperform other commodities with a supply shortfall likely over the coming years. Zinc has hit fresh 10 year highs and despite Australia not being a massive Zinc producer it's certainly potentially bullish for our mining sector which started to rebound early last year.

US data out tonight in preliminary jobs numbers (aka ADP Non-Farms). Economists predict we'll see around 151K new jobs created which would be the slowest jobs growth in about a year. This is just a preliminary number with the official figure released Friday night. US ISM non-manufacturing PMI is released a little later in the evening with no change expected to last months reading. Speeches from ECB President and Fed Chair Yellen in the early hours of tomorrow morning could be market moving, however volatility is certainly low at the moment and perhaps we'll see further non-events as a result.

AUD EXCHANGE RATES:

AUD/USD – 0.7833

AUD/GBP – 0.5916

AUD/EUR – 0.6670

AUD/NZD – 1.0940

AUD/JPY – 88.427

COMMODITIES: 

Gold – A$1623/oz

Silver –  A$21.24/oz

WTI – US$50.31/barrel

DATA RELEASES TODAY:

GBP – Services PMI at 7.30pm

USD - ADP Non-Farm Payrolls at 11.15pm

USD - ISM Non-Manufacturing PMI at 1.00am

EUR & USD - ECB President and Fed Chair Speaking in early hours of tomorrow morning

***Above rates are indicative wholesale rates and intended as a guide only***

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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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Topics: Market, Report

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