Market Watch AU – 29th November 2023
The AUDUSD has marched its way to a four month high in offshore trading and looking comfortable over 0.66-cents ahead of the Australian CPI due out this morning. These gains come in the face of a below expectation Retail Sales release yesterday and seemingly dovish comments from RBA Governor Bullock who noted that the Australian inflationary outlook was similar to countries overseas. The US-dollar declined to a three-and-half month low against the G10 peers after Fed Governor Waller suggested there was a possibility for the Fed to adjust its funds rate lower in coming months if inflation continues to ease. Traders have latched on to this commentary and increased bets for a Fed cut before March next year, to 33%. Treasury yields have also retreated. Importantly today for traders is the release of the Australian Consumer Price Index (CPI) for October, where a decline to 5.2%, from previous 5.6%, for headline CPI is expected. Market sentiment remains mixed but trending higher, so analysts will look for some consolidation of recent moves, for a platform to build if there is a chance for another move up. Support has held to 0.6575/85 on any pull back. Also of note in our day’s trading, will see the RBNZ announce any changes to their OCR, though expected to remain at 5.5%.
Wall Street indices ended the day pretty much flat with investors digesting conflicting Fed Reserve officials as to what the Fed funds trajectory may look like into next year. Upbeat US consumer confidence data did offer some comfort to investors to add to growth portfolios. The DJI ended higher by just +0.2%, the S&P500 lost -0.04% and the Nasdaq softened by -0.02%. Australian shares are expected to open higher today, with sturdy raw materials pricing underpinning the mining sector, though investors will be looking ahead to the CPI release later today, for a hint of direction on interest rates by the RBA.
Gold prices continue to climb for another session, up 1.4% in trading overnight, garnishing benefit from a weaker US-dollar and US Treasury yields softening, as investors continue to find excuses that the US Fed may be done with its rate hiking cycle.
Copper prices recovered higher for the day following news of possible supply disruptions in Panama and Peru mines, as well as indications that China will extend its support to their property sector. Iron Ore prices on the Dalian exchange retreated by 2.6% on the near-dated contracts, as Chinese authorities campaign to monitor prices and seen to intervene in the market to restrict price rallies
Crude Oil prices traded higher for the session, as investors traded on the assumption that OPEC+ meeting later this week would deliver further production cuts to supply, as well as a weaker US-dollar.
Open today 0.6649
Yesterday’s Range 0.6597 / 0.6666
Open today 0.6136
Yesterday’s Range 0.6080 / 0.6147
Yesterday’s Range 1.0826 / 1.0862
Yesterday’s Range 0.6027 / 0.6057
Yesterday’s Range 4.7232 / 4.7578
Yesterday’s Range 0.5227 / 0.5246
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