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CAFX Market Update 5/12/2022

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

Australia Company Gross Operating Profits (QoQ) (Q3)
Japan Services PMI (Nov)
Eurozone S&P Global Composite PMI (Nov)
Services PMI (Nov)
Retail Sales (MoM) (Oct)
United Kingdom Composite PMI (Nov)
Services PMI (Nov)

Macro Report

The Aussie dollar broke through the 0.6800 level during last week’s trading on the back of a weaker US Dollar. The US Dollar (via the DXY) suffered its worst month since September 2010, losing 5.1% on dovish remarks from Fed Chair Jerome Powell that alluded to a slower pace of tightening. After hitting a 13-week high last Thursday, at 0.6845, the AUD/USD pair struggles to keep above the 0.6800 figure as markets remain cautious ahead of the RBA’s final cash rate meeting of the year.

Last Friday’s US nonfarm payroll data revealed a 263,000 increase in November, significantly higher than market expectations of 200,000. The unemployment rate remains steady at 3.7%, while participation slightly eased. Also rising more than expected was annual wage inflation. Wage pressure continues to undermine the Fed’s policy as Average Hourly Earnings (YoY) increased to 5.1% from 4.9% in the prior month, rising twice as much as forecast.

Markets expect the RBA to deliver another 25-basis point rate hike on Tuesday, taking the Official Cash Rate (OCR) from 2.85% to 3.1%. On the US front, economic data releases will feature ISM Non-Manufacturing PMI, due in the early hours of tomorrow, and Friday’s November PPI data.

AUD/USD Daily Chart

DXY (USD INDEX) Daily Chart

Major Global Markets 

Currencies Level Change (%)
AUD/USD 0.6791  0.01
AUD/JPY 91.2280 -0.03
AUD/CNH 4.7540 -0.76
DXY 104.5450 -0.17
Rates Yield (%) Change
US 10 Yr 3.49 -0.33
Aus 10 Yr 3.32 -1.65
Equities Level Change (%)
S&P 500 4,071.70 -0.12
NASDAQ 11,461.50 -0.18
ASX 200 7,301.50 -0.72
Commodities Level Change (%)
Iron Ore 106.50  1.43
Gold 1,809.60 -0.31
Brent Crude Oil 85.57 -1.51