Market Watch AU – 10th November 2023
Attention to the day’s trading centred around US Fed Chairman Powell’s speech to the IMF annual research conference, which was interrupted by Climate Change protesters, but when he resumed his comments of significance were towards his views around the structural economic change that has emerged since the Covid pandemic , suggesting that the Fed “is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time” and at this point he is not confident that they have reached such an outcome. US Treasury yields rallied higher on the tail of these remarks and the US-dollar has posted another session gain in four. The AUD has dropped significantly against the USD and has deteriorated back to the 0.6360/70 support zone. Ahead today we look to the RBA Statement of Monetary Policy for any directional clues that could be triggered by policy, affecting the local currency. The AUDUSD opens Asia session just behind the 0.6370 and any further weakness sees 0.6350 in play. An advance back above 0.6430’s would be necessary to negate any of the downside pressure near-term.
Wall Street equities retreated under pressure from stronger Treasury yields that rallied on the comments from Fed Chair Powell overnight and what turned out to be a disappointing 30yr Treasury bond auction. The DJI fell -0.6%, the S&P500 lost -0.6% and the Nasdaq closed down -0.7%. Following the offshore activities and the effect on global bourses, Australian shares are expected to open lower today, though some support by mining sector shares should help to offset some of the losses.
Gold prices rebounded as traders used the recent weakness to re-establish buying positions, as geo-political tensions remain, though contained in the Middle East.
Copper prices held steady as traders digest the economic activity for top consumer, China, and hopes that authorities will further support its faltering property sector. Iron Ore prices advanced for another session on hopes for further support to the China property sector that outweighed the another round of disappointing economic data.
Brent Crude Oil prices squeezed out a gain back over $80/bbl, as traders squared up short positions from earlier in the week.
Open today 0.6367
Yesterday’s Range 0.6364 / 0.6428
Open today 0.5894
Yesterday’s Range 0.5897 / 0.5955
Yesterday’s Range 1.0784 / 1.0844
Yesterday’s Range 0.5968 / 0.5999
Yesterday’s Range 4.6462 / 4.6877
Yesterday’s Range 0.5205 / 0.5232
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