RBA

AUD/USD was the strongest performer among the Aussie pairs we track in November. A combination of hawkish RBA alongside bets of Fed cuts in 2024 played nicely with our long bias. What will December bring?

Headline Australian CPI undershot market expectations in October, although progress on taming underlying price pressures was disappointing, helping to boost AUD/USD.

The prospect of another rate hike from the Reserve Bank of Australia (RBA), a crackdown of speculative forces in iron ore futures markets and failure to clear a stubborn resistance level has Australia’s ASX 200 facing the prospect of renewed downside.

There was a risk that the RBA’s minutes were more hawkish than their November statement had let on, and this certainly seems to be the case. And hawkish minutes alongside a lower USD/CNH and USD/JPY have helped AUD/USD test a new cycle high today. Can it now gun for 66?

In what seems like a while, the US economic calendar is relatively quiet with no top tier events. But US bond auctions should be on trader’s radars as they provide a look at how strong demand is (or not) for the ultimate US safe-haven asset. And if demand is low, it could send yields higher and shake a few equity bulls out of the tree and generally weigh on risk sentiment. We also have the RBA minutes and a potentially ‘live’ speech for the governor to keep tabs on.

With plenty of major data and central bank speeches scheduled in the UK and Australia this week, the next few days may prove to be critical for the medium-term trajectory for GBP/AUD heading into 2024.

Tumbling US stock futures and neutral language from RBA Governor Michele Bullock has seen AUD/USD plunge in early Asian trade, continuing the sizeable reversal seen on Wednesday following the release of Australia’s Q3 hot inflation report.

Australian inflation has come in hot in Q3, seeing the odds for a RBA rate hike in November lift to 60%. The AUD/USD has moved higher while the ASX 200 has reversed earlier gains, turning negative for the session.

In an environment of heightened risk aversion, sluggish global economic growth and continued grind higher in rates, a volatile monthly inflation indicator from Australia doesn’t scream as overly important.

Australia’s August labour force survey had something for both AUD/USD bulls and bears, but in the end the detail does not meaningfully change the outlook for interest rates.

AUD/USD downside has slowed despite a lot of negativity, bolstering the case for a near-term bounce ahead of key risk events later this week.

With the RBA on the sidelines, it means external factors will continue to drive movements in the AUD, ASX 200 and Australian bond futures for the foreseeable future.

A playbook on how the AUD/USD, ASX 200 and Australian bonds should the RBA signal an end to rate hikes.

AUD/USD slumps on disappointing data, undermining the case for higher interest rates

Hong Kong’s Hang Seng is arguably the ugliest index chart in the world right now, for good reason.

Australian stocks don't look particularly cheap, adding to downside risks from earnings disappointments.

Unemployment jumps unexpectedly diminishing the risk of a wage price spiral forming.