Market Watch AU – 13th December 2023
Overnight the key event was the US CPI release, which came in around expectations but gave the US-dollar a bit of a ride following the print. The US-dollar initially dropped but bounced quickly , however, still holding negative territory for the day. The AUDUSD in response initially gained to 0.6610’s before retreating to 0.6550’s support, where it opens our day in Asia. The US inflation eased 3.1%yoy in November and was in line with forecasts. Core CPI remained unchanged at 4% which also matched consensus. This report shouldn’t change the Fed’s hawkish rate path of ‘higher for longer’, though may temper markets expectation for 3 or 4 rate hikes next year. Locally, we had the release of the Westpac Consumer Confidence, which rebounded with a 2.7% gain and NAB Business Confidence index which slipped to -9, its worst level since 2012 outside of the pandemic period. RBA Governor Michele Bullock in her speech yesterday said that the RBA would continue to monitor data in determining its rate path, reiterating that the central bank was aiming to slow the economy enough to reduce inflation to the bank target while preserving the employment gains achieved over the past few years. The AUDUSD pair looks to hold its consolidation pattern ahead of Australian Employment later in the week and results of the US Fed meeting. So look to support at 0.6530’s and rallies exhausting at 0.6630’s.
Wall Street indices extend gains after the release of the US CPI data which was in line with expectations. The DJI was up +0.5%, the S&P500 gained +0.5% and the Nasdaq climbed just +0.7% by close. Australian shares are expected to remain steady at the open with potential downside in the energy sector after the fall in oil prices overnight, while US CPI release trims hopes for a Fed rate cut any time soon.
Gold prices eased as US inflation data remains firm and boosts market expectations that rates will remain higher for longer in the US. As geopolitical tensions remain precarious, the lustre metal is likely to remain supported and attract buyers on significant dips.
Copper prices grind higher on cautious optimism amid economic signals. Iron Ore futures on the Dalian exchange declined.
Crude Oil prices dumped over 3% as concerns remain for oversupply, with the US Energy Information Administration reducing its price forecasts for 2024 by 11%.
Open today 0.6560
Yesterday’s Range 0.6540 / 0.6612
Open today 0.6134
Yesterday’s Range 0.6105 / 0.6170
Yesterday’s Range 1.0693 / 1.0732
Yesterday’s Range 0.6071 / 0.6127
Yesterday’s Range 4.7059 / 4.7446
Yesterday’s Range 0.5217 / 0.5249
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