Market Update – 26th October 2017 – Aussie Down On Poor Inflation Number & Metals Sell-Off

A quick look at rates and we see some sharp declines in the AUD vs. the majority of our peers. Aussie inflation data released yesterday failed to live up to expectations coming in at just 0.4% vs. the 0.5% figure economists had predicted and hoped to see. Annualised inflation is now running at an estimated 1.8% which is just short of the RBA’s 2-3% target but certainly not far off; with that in mind expectations for a number 25 basis point rate hikes in 2018 remain very likely.

The weaker than anticipated inflation figures resulted in a swift decline in the local currency with the Aussie lower by over 1 percent across the board. Metals prices falling throughout the late evening also didn’t help to stem losses in the local currency, however the commodities and AUD sell-off has since eased. AUD/GBP fell the most following stronger than anticipated U.K GDP figures.

Ahead tonight is the ECB minimum bid rate (interest rate) decision with most expecting no change to interest rates from 0%. However as growth metrics pick up across Europe this is likely to change and we will eventuality see rates rise from these historic and in my opinion ridiculously ineffectual lows.

AUD EXCHANGE RATES:

AUD/USD – 0.7697

AUD/GBP – 0.5798

AUD/EUR – 0.6515

AUD/NZD – 1.1178

AUD/JPY – 87.564

COMMODITIES: 

Gold – A$1658/oz

Silver –  A$22.02/oz

WTI – US$52.21/barrel

DATA RELEASES TODAY:

EUR – Minimum Bid Rate (Interest Rate) Decision at 10.45pm