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CAFX Market Update 31/10/2022

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 Industrial Production (MoM) (Sep)
Retail Sales (YoY) (Sep)
Australia Private Sector Credit (MoM) (Sep)
Retail Sales (MoM) (Sep)
China Chinese Composite PMI (Oct)
Manufacturing PMI (Oct)
Non-Manufacturing PMI (Oct)
United Kingdom Nationwide HPI (MoM)
Eurozone CPI (YoY) (Oct)

Macro Report

US stocks surged on improved market sentiment, while causing the US dollar to come off. The DXY index has lost more than 1% over the past two weeks as it declined for a second consecutive week.

The DXY is subdued as bets for another jumbo rate hike in December have cut back significantly. This displayed shift is largely owed to a series of US data releases that have projected figures below market estimates. Markets have also witnessed Fed officials portray a more cautious tone in recent statements. Although the Fed will likely deliver another 75-basis point rate hike on Thursday, their guidance and outlook for December will gain the most traction from markets as a slower tightening path is expected.

The RBA’s interest rate decision kicks off the interest rate decision-filled week. Followed by the BOE and Fed on Thursday. Markets are eyeing a much less hawkish rate hike from the RBA. All of the big four Aussie banks, except Westpac, are predicting that the RBA will raise rates by 25 basis points in tomorrow’s meeting, followed by another 25 basis points in December. This will bring the Official Cash Rate to 3.1% by the end of the year.

Following the central bank’s rate decisions, attention will shift to US Nonfarm Payrolls data on Friday.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6403 -0.12
AUD/JPY 94.5410 -0.11
AUD/CNH 4.6516 -0.44
DXY 110.7930  0.04
Rates Yield (%) Change
US 10 Year 4.01  0.01
Aus 10 Year 3.73  0.93
Equities Level Change (%)
S&P 500 3,901.06  2.46
NASDAQ 11,102.45  2.87
ASX 200 6,785.70 -0.87
Commodities Level Change (%)
Iron Ore 93.01  0.22
Gold 1,644.80  1.25
Brent Crude oil 95.77 -1.23