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CAFX Market Update 05/09/2022

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

Australia                    – Company Gross Operating Profits (QoQ) (Q2)
Retail Sales (MoM)
China                         – Caixin Services PMI (Aug)
Eurozone                   – Services PMI (Aug)
Retail Sales (MoM) (Jul)

Macro Report

With traders shifting their money out of risk assets due to growing economic and inflationary concerns, global markets ended the last week with steep losses.

Meanwhile, in the United States, the Non-Farm Payroll showed unexpected data, with hiring increasing more than forecasted in August. A gain of 315,000 jobs, slightly above the 300,000 predicted. However, wages did not increase as much as predicted and were perceived as encouraging for the inflation outlook.

Last week,  the Aussie dollar declined around 1% on lower commodity prices with iron ore prices in China falling by almost 10%. China remains a significant headwind for the Aussie dollar due to lockdowns in Chengdu, a major industrial city in China.

Looking forward, the Reserve Bank of Australia (RBA) is set to deliver its interest rate decision tomorrow. While markets anticipate a 50-basis point rate hike, bringing the Official Cash Rate to 2.35%, bets for continued aggression from the country’s central bank have eased. This comes about even though Australia’s inflation print is still significantly above the 2-3% target at 6.1%.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6797 -0.22
AUD/JPY 95.4170 -0.09
AUD/CNH 4.6977 -0.18
DXY 109.8720  0.31
Rates Yield (%) Change
US 10 Year 3.19 -0.070
Aus 10 year 3.63 -0.006
Equities Level Change (%)
S&P 500 3,924.26 -1.07
NASDAQ 11,630.86 -1.31
ASX 200 6,828.71 -0.25
Commodities Level Change (%)
Iron Ore 98.00 -1.01
Gold 1,721.70 -0.05
Brent Crude oil 94.38  1.46