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CAFX Market Update 19/10/2022

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 CPI (YoY) (Sep)
PPI Input (MoM) (Sep)
Eurozone CPI (YoY) (Sep)
United States Building Permits (Sep)

Macro Report

The RBA published its minutes from its October meeting yesterday, with many expecting the board to be less hawkish or even provide dovish forward guidance following the unexpected 25-basis point rise earlier this month. However, the board reasoned that slowly adjusting interest rates would allow the RBA to “assess the effects of the significant increases in interest rates” and “the evolving economic outlook”. Deputy Governor Michele Bullock also justified the 25-basis point hike by sharing that the board meets more frequently in contrast to most peers, allowing the RBA to be uniquely positioned with the ability to achieve similar tightening with smaller individual rate hikes.

Although comments from the RBA minutes managed to prop up the Aussie dollar to above the 0.6300 level, it appears to be stuck around a tight range.

Tomorrow’s release of new Aussie employment data may offer fresh momentum for the AUD/USD currency pair, with employment expected to increase for the second consecutive month. The forecasted 25k jobs to be added in September might keep the Aussie dollar afloat, but this could be short-lived given the Fed’s more aggressive hiking cycle and the release of key US data including tomorrow’s Philly Fed Index and the Initial and Continuing Jobless Claims.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6322  0.21
AUD/JPY 94.2860  0.13
AUD/CNH 4.5592  0.15
DXY 112.1300  0.08
Rates Yield (%) Change
US 10 Year 4.01 -0.009
Aus 10 Year 3.94  0.042
Equities Level Change (%)
S&P 500 3,719.98  1.14
NASDAQ 10,772.40  0.90
ASX 200 6,779.20  1.72
Commodities Level Change (%)
Iron Ore 94.93 -1.04
Gold 1,657.70  0.11
Brent Crude oil 90.03 -1.74