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CAFX Market Update 02/09/2022

Welcome to our daily market update where we help keep you informed on the latest happenings in the world of FX and show you what this means for the Mighty Aussie Dollar.
If you have any questions or would like anything further explained, please don’t hesitate to reach out to your account manager or email info@cafx.com

Key Data Being Released Today

United States               – Average Hourly Earnings (MoM) (Aug)
Nonfarm Payrolls (Aug)
Participation Rate (Aug)
Unemployment Rate (Aug)

Macro Report

The Aussie dollar remains under pressure on sour risk sentiment as China’s economic woes drag on. Yesterday’s disappointing PMI data showed signs of Australia’s manufacturing slowing in August, with data coming in at 53.8 compared to the predicted 54.5 and a prior month’s print of 55.7. On top of downbeat Aussie PMI data, Aussie housing and China’s Caixin Manufacturing PMI also favour bears, with China’s PMI falling to 49.5 in August from 50.4 in July amid Covid lockdowns and power cuts.

Due to the Aussie dollar’s role as a proxy for the Chinese economy, weak data dampened AUD support. Meanwhile, the US dollar strengthened, underpinned by soaring Treasury yields. The 2-year yield hit its highest level (3.516%) since 2007, while the 10-year jumped 12 basis points to 3.257%.

Looking ahead today, the US jobs report will be the big focus. Markets eagerly wait for clues as to whether the Feds rate hikes this year have successfully cooled US labour market conditions. However, the release of robust jobs data may imply the Feds can continue with its aggressive monetary policy stance, further increasing the interest rate differentials between the US and its peers.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6795  0.10
AUD/JPY 95.1870  0.01
AUD/CNH 4.6938  0.13
DXY 109.5980 -0.08
Rates Yield (%) Change
US 10 Year 3.25 0.123
Aus 10 Year 3.69 0.006
Equities Level Change (%)
S&P 500 3,966.85  0.30
NASDAQ 11,785.13 -0.26
ASX 200 6,845.60 -2.02
Commodities Level Change (%)
Iron Ore 99.00 -2.46
Gold (Comex) 1707.50 -0.11
Brent Crude (ICE) 92.36 -3.43