Market Update – 5th November 2018 – AUD Posts Solid Week, RBA Cash Rate Tomorrow & U.S Mid Terms Next Up

The Aussie dollar finished the week in good form adding around 2% vs. the Greenback and holding stable vs. the Euro and GBP. The turnaround in fortunes for the Aussie dollar was due to stronger than expected trade balance numbers on the back of surging exports while producer prices (which were released on Friday) leapt 0.8% in the latest quarter suggesting producers are more comfortable charging higher prices for their goods. All this in conjunction with a more optimistic view of Trump being able to do a trade deal with China caused market sentiment to improve quite dramatically.

Not a great deal of economic data is out today however we do have the all important RBA cash rate decision tomorrow at 2.30pm. Whilst the market is expecting no change to interest rates which have been held steady at 1.5% since August 2016 we will be watching closely the RBA’s accompanying rate statement for commentary on the economy, the housing sector and global trade. Also, we’ll be looking for hints as to what the RBA’s next rate move might be, however they will likely drip feed their hints over the course of months in order to not shock the market and see a sudden surge in the AUD – which at its current low level is supporting our export economy of mining, education and tourism.

AUD EXCHANGE RATES:

AUD/USD – 0.7158

AUD/GBP – 0.5492

AUD/EUR – 0.6281

AUD/NZD – 1.0800

AUD/JPY – 81.030

USD/BTC – $6,389

OTHER MARKETS: 

All Ords (XAO) – 5,935

Gold – A$1,713/oz

Silver –  A$20.50/oz

WTI – US$62.89/barrel

DATA RELEASES TODAY:

AUD – MI Inflation Gauge m/m at 11.00am

GBP – Services PMI at 8.30pm

USD – ISM Non-Manufacturing at 2.00am