Market Watch AU – 6th November 2023
The AUDUSD continued its march higher on Friday getting a final boost through 0.65-cents after the US Non-farm payrolls came in softer than expected and suggested the Fed will be done with raising rates further under its policy campaign. The key for the Aussie from here will be the Reserve Bank of Australia (RBA) meeting tomorrow. The economist polls suggest that there is a 90% chance that the RBA will raise rates by 25bp to 4.35%, while futures markets are pricing in 57% chance of a hike. While these expectations have been positive for the antipodean currencies, a diversion from this sentiment may deflate the AUDUSD momentum. Look for resistance at 0.6510/25 and buying interest to support at 0.6400/10 on initial moves. Looking ahead for markets this week data is more on the limited side of the scale with main events being the RBA decision tomorrow, Fed Chairman Powell’s speech and China monthly data the key releases to watch for the week.
Wall Street leading stocks rallied further on Friday into the weekend close, as US Treasury yields dropped after US Non-farm payrolls exhibited signs of slowing and an uptick in unemployment, supporting the market sentiment that the Fed maybe done with hiking interest rates. The DJI rose +0.7%, the S&P500 gains +0.9% and the Nasdaq closed up +1.4%. Australian shares are expected to open higher today, following the Wall Street mood and boosted by favourable commodity prices supporting the raw materials and energy sectors.
Gold prices traded higher into the weekend responding to the weaker US-dollar and easing Treasury yields, after US Non-farm Payrolls came in weaker and confirmed views that the US Fed is done with raising interest rates beyond the 5.25-5.50% band.
Copper prices on the LME got a lift from an easing US-dollar and softer Treasury yields, though higher inventory levels in exchange registered warehouses kept gains in check. Iron Ore prices enjoyed another positive week amidst stimulus related optimism for the raw material, though some concerns remain as to the extent of government supervision.
Brent Crude Oil prices dropped over 2% on Friday as Middle East conflict tensions eased supply concerns.
Open today 0.6509
Yesterday’s Range 0.6420 / 0.6518
Open today 0.5994
Yesterday’s Range 0.5885 / 0.6000
Yesterday’s Range 1.0849 / 1.0920
Yesterday’s Range 0.6045 / 0.6073
Yesterday’s Range 4.7061 / 4.7573
Yesterday’s Range 0.5255 / 0.5288
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