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• A positive end to the week on Wall St. saw the Nasdaq close +.8%, the S&P 500 +.7%, and the Dow Jones +.5%. U.S. 10-year yields rallied 10bps to 4.38%, while crude oil rose .4% to $69.50 a barrel. AUD/USD closed the week at 0.6560 after trading in a 0.6554/0.6591 range.
• Asian equities finished Friday mixed, the Nikkei -2.6%, Hang Seng +0.9%, and Shenzhen flat. Locally, the ASX finished down half a percent as healthcare and financials lagged. AUD/USD was offered throughout the session from 0.6582 opening levels down to 0.6560.
• European equities were quick off the mark, Stoxx, FTSE, CAC and DAX +0.4%. The US 10yr was up slightly at 4.29% as was brent, above $73/bbl. GBP/USD continued its recovery to trade 1.2918 despite misses in UK’s Nationwide House price index at 2.4% NSA y/y (2.8% exp.) for October. EUR/USD meanwhile fell to 1.0860 and USD/JPY traded at highs above 152.80.
• Into the London lunch and the UK’s final October manufacturing PMI fell short of forecasts (49.9 vs 50.3 exp.) as GBP/USD continued higher to 1.2926. The antipodes traded within 10pts of 0.6557 and 0.5964 lows while EUR/USD found support above 1.0850. USD/JPY remained around 152.70/80 and US equities were a touch stronger ahead of US labour data.
• US Non-Farm Payrolls printed at 12k, down from a negatively revised 223k and printing well below expectations of 100k. The unemployment rate was steady at 4.1% as expected though the participation rate unexpectedly fell 0.1% to 62.6%. Finally and average hourly earnings were 0.4% MoM, higher than forecasts of 0.3%, with the YoY result matching expectations at 4.0%.
• Though the results impacted by the impact of recent hurricanes and industrial action, the USD still weakened across the board in the aftermath. AUD/USD rose to highs of 0.6591 with NZD/USD moving up towards 0.6000 while EUR/USD and GBP/USD made respective highs of 1.09055 and 1.2980. USD/JPY fell around 100 points to match earlier 151.80 lows while USD/CAD dipped to 1.3903 lows.
• US Manufacturing PMI for October was revised up to 48.5 from an initial reading of 47.8 while Construction Spending for September rose 0.1% MoM against expectations of no change. Of most importance, ISM Manufacturing for October printed at 46.5, down from 47.2 and below expectations of 47.6. Within the details, Prices Paid rose to 54.8 to print higher than expectations of 50.0 while New Orders was a modest beat and Employment missed to the downside.
• Little reaction to the data with the USD generally recovering over the NY morning with USD/JPY the main mover as it rallied all the way back to highs above 153.00, reaching 153.07. EUR/USD slipped back to lows under 1.0850. Lesser movement seen elsewhere.
• Wall St was higher from the open with each of the major indices moving to 1% type gains across the NY morning. Across the Atlantic, European stock markets remained firm into the close with the FTSE and CAC closing up 0.8% while the DAX gained 0.9% on the day.
• The greenback moved steadily higher for the duration of the NY afternoon with the local unit falling to new lows of 0.6554 in late trade. Elsewhere and NZD/USD fell to 0.5960 while EUR/USD dipped to 1.0832 with USD/CAD making highs of 1.3959. Usd/JY making new highs of 153.08 in the move.
• Wall St pared gains in late trade though still closed higher with the S&P up 0.4% at the close while the Dow gained 0.7% and the Nasdaq closed up 0.8%.
To watch for
• AU – Oct. ANZ-Indeed Job Advertisements m/m
• AU – Oct. Melbourne Institute Inflation y/y
• EU – Oct F. HCOB Eurozone Manufacturing
• MX – Aug. Gross Fixed Investments MSA y/y
• US – Sep. Factory Orders
• US – Sep F. Durable Goods Orders
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6599 |
| AUD/NZD | 1.1078 |
| AUD/JPY | 100.68 |
| AUD/CNH | 4.6924 |
| AUD/EUR | 0.6066 |
| AUD/GBP | 0.5088 |
| AUD/HKD | 5.1318 |
Chart of the day
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