Market Watch AU – 15th November 2023
The US-dollar has tumbled against a basket of major currencies following the release of US Consumer Price (CPI) for October which showed that the pace of inflation in the nation is moderating and underpins market expectations that the US Fed is done with further rate hikes. US Treasury yields have fallen, with the 10yr bond falling below the 4.5% yield which has been a key reason for US-dollar strength for the most part of this year. The AUDUSD has rallied strongly, posting an over 2% gain and reaching a session high at 0.6512. More broadly, risk appetite has improved with equities and commodities all back in favour for investors. Locally today we look for the Wage Price Index release for Q3, but trading will mostly be dominated by the weaker US-dollar and if this continues, may be a catalyst for further gains on the antipodeans. The AUDUSD looks to challenge the 0.6520/25 where it has peaked four times since August, while initial support now shifts to 0.6440 on any intra-day retreat. Traders are still watching the JPY and speculation as to whether BoJ will intervene to limit the depreciation of their currency against the USD.
Wall Street equities ended the day much higher, led by tech sector gains that were spurred on by a softer than expected read for US CPI for October, suggesting the Fed is now done with rate rises. The DJI rose +1.4%, the S&P500 rallied 1.9% and the Nasdaq gained 2.2%. Following the offshore activities and the moves on global bourses, Australian shares are expected to open higher today, underpinned by favourable moves on international bourses and commodity prices.
Gold prices rallied 1% higher as the US-dollar and US Treasuries retreated following the release of a softer CPI read, prompting investors to shift expectations further towards the likelihood that the US Fed will be done with raising rates in this cycle.
Copper prices trade higher in response to a weaker US-dollar after the US CPI release. LME Copper contracts were trading up +0.7% at close. Dalian Iron Ore prices finished a tad higher , as traders measured the overall stimulus measures in China and a drop in shipments, against waning demand for steel.
Brent Crude Oil prices continued their positive trajectory after the International Energy Agency (IEA) lifted its demand forecasts and the US-dollar retreated after the release of US CPI.
Open today 0.6507
Yesterday’s Range 0.6361 / 0.6512
Open today 0.6008
Yesterday’s Range 0.5860 / 0.6013
Yesterday’s Range 1.0820 / 1.0899
Yesterday’s Range 0.5937 / 0.5985
Yesterday’s Range 4.6448 / 4.7219
Yesterday’s Range 0.5173 / 0.5208
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