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CAFX Market Update 12/10/2022

Welcome to our daily market update, where we help keep you informed on the latest happenings in the world of FX.
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 Kingdom RICS House Price Balance (Sep)
United States Industrial Production (MoM) (Aug)
Manufacturing Production (MoM) (Aug)
Monthly GDP 3M/3M Change
Trade Balance (Aug)
Eurozone Industrial Production (MoM) (Aug)
United States Core PPI (MoM) (Sep)
PPI (MoM) (Sep)

Macro Report

The Aussie dollar continues to struggle against the exceptionally strong US dollar amid the current environment of deteriorating market sentiment. Yesterday’s Westpac Consumer Sentiment data showed a declined to -0.9% in October from 3.9% the prior month. While NAB’s Business Confidence came in at 5 versus a previous month’s print of 10. Compounded with a dovish RBA and worrying signals from Australia’s primary trading partner – China, the Aussie dollar remains under significant pressure.

The AUD/USD pair declined for a fourth consecutive day yesterday, reaching a low of 0.62472 as the US dollar was able to maintained its strength on Bank of England Governor Andrew Bailey’s announcement of the Financial Policy Committee’s decision to intervene in the financial market due to volatility. Comments from the Governor underpinned market risk-aversion, elevating the US dollar while sending US equities tumbling and treasury yields higher.

The S&P 500 dropped 0.65% to 3,588.84, and The Nasdaq Composite declined by more than 1% to 10,426.19.

Markets remained worried ahead of tonight’s US PPI data, followed by tomorrow’s CPI figures. US PPI (MoM) is expected to rise by 0.2% compared to the previous print of -0.1%. Should PPI figures print lower than expected, it could be perceived as positive news on its own, suggesting a weakening wholesale inflation. However, it may not necessarily mean we will see a softer US CPI number.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies   Level Change (%)
AUD/USD 0.6276  0.06
AUD/JPY 91.5020  0.01
AUD/CNH 4.4957 -0.16
DXY 113.2210  0.07
Rates   Yield (%) Change
US 10 Year 3.95  0.060
Aus 10 Year 4.03 -0.003
Equities   Level Change (%)
S&P 500 3,588.84 -0.65
NASDAQ 10,426.19 -1.10
ASX 200 6,645.00 -0.34
Commodities   Level Change (%)
Iron Ore 96.97 -1.03
Gold 1,686.00  0.64
Brent Crude oil 93.68 -2.61