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CAFX Market Update 21/10/2022

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

Japan National Core CPI (YoY) (Sep)
United Kingdom Core Retail Sales (YoY) (Sep)
Retail Sales (MoM) (Sep)

Macro Report

The Australian Bureau of Statistics (ABS) published Aussie unemployment data yesterday, revealing a weaker-than-expected labour market. The underwhelming labour force report showed a 0.9K overall change in employment for September, well below the 25K consensus and the prior month’s print of 36.3K. Full-time employment change dropped to 13.3K in September, while the participation and unemployment rates remained unchanged from the previous month and printed as forecasted at 66.6% and 3.5%, respectively.

Data supported RBA’s decision earlier this month to wind down its hiking cycle, and markets are now anticipating another 25-basis point rake hike in November. However, should next week’s Aussie CPI print hotter-than-expected, the RBA may be forced to lift its Official Cash Rate by 50-basis points.

The AUD/USD currency pair witnessed a surge overnight to trade at a fresh weekly high (0.6356) on mixed US data, but most gains reversed early this morning. At the time of writing, the AUD/USD is trading at 0.6275, down 0.10%.

The Aussie dollar struggled to hold on to its gains as US yields rocketed to 14-year highs, showing support for the US dollar. Yields were propelled following Hawkish remarks from Federal Reserve Bank of Philadelphia President Patrick Harker. He reinforced the need to keep raising rates after describing the current progress on curbing inflation as “disappointing”.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6275 -0.10
AUD/JPY 94.2270 -0.09
AUD/CNH 4.5476 -0.14
DXY 112.8810 -0.09
Rates Yield (%) Change
US 10 Year 4.23  2.51
Aus 10 Year 4.15  2.11
Equities Level Change (%)
S&P 500 3,665.78  -0.80
NASDAQ 10,614.84  -0.61
ASX 200 6,730.70  -1.02
Commodities Level Change (%)
Iron Ore 94.86 -0.37
Gold 1,636.80  0.16
Brent Crude oil 92.76  0.38