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
US equities opened the week on a positive, with the S&P 500 gaining 0.5%, Tesla standing out as a top performer, rising 7%. Speculation suggests that Trump’s team aims to advance a new framework for regulating self-driving vehicles. In Europe, the Euro Stoxx 50 dipped 0.1%, while the FTSE 100 increased by 0.6%. US bond yields eased slightly, as the 10-year Treasury yield fell by 1.6 bps to 4.42%. Meanwhile, the US dollar index softened, and was down 0.3% to 106.30.
• The AUD/USD pair saw a 1% increase overnight, driven by rising commodity prices and a weakening USD. Brent crude oil futures surged over 3%, approaching $73 per barrel. Today’s release of the RBA’s November meeting minutes (11:30 AM Sydney time) will be closely analyzed for any policy shifts, despite the statement and press conference maintaining a tone similar to September’s.
• AUD/JPY recovered most of Friday’s losses, reaching near 100.6. Bank of Japan Governor Ueda didn’t hint at a December rate hike, reiterating that rate hike timing will depend on economic activity, prices, and financial conditions. The Japanese OIS market is currently pricing a 56% probability of a December rate increase.
• The lack of clear rate hike guidance from Governor Ueda, coupled with positive risk sentiment, suggests potential further gains for AUD/JPY and USD/JPY. Sharp increases in USD/JPY could prompt Japan’s Ministry of Finance to intervene to support the JPY. Japan’s Finance Minister recently stated he would “monitor the market with a very high sense of urgency,” as Japanese authorities are wary of “one-sided, sudden moves.
• AUD/EUR rebounded to around 0.6140, while EUR/USD rose to near 1.0600. ECB Governing Council member Joachim Nagel’s comments on potential inflation increases due to trade tensions led to a hawkish repricing of ECB rates. The Eurozone OIS market now prices in 355bp of ECB cuts by March 2025, down from about 390bp yesterday. The two-year Bund yield briefly spiked by over 7bp overnight. The ECB’s upcoming negotiated wage indicator will provide the first insight into Q3 2024 Eurozone wage growth (9 PM Sydney time), following a slowdown but still elevated growth in Q2 2024.
Mid-market rates.
| Currency Pair | Mid-market rate |
| AUD/USD | 0.6504 |
| AUD/NZD | 1.1044 |
| AUD/JPY | 100.63 |
| AUD/CNH | 4.7024 |
| AUD/EUR | 0.6138 |
| AUD/GBP | 0.5131 |
| AUD/HKD | 5.0624 |
Chart of the day
Disclaimer:
The market update provided by Corporate Alliance FX (CAFX) is for reference only and does not constitute a bid, levy, offer or invitation to offer for the financial product, the basis for any contract or commitment, a recommendation for the purchase or sale of any investment instruments, financial, legal, tax, investment advice, investment advice or other opinions. It will not be legally liable for any consequences or losses caused by the information or content involved.
Corporate Alliance Group Pty Ltd T/A Corporate Alliance FX (CAFX) (ABN 58 167 119 226, AFSL 523351) (i.e. CAFX), CAFX independently holds the Australian Financial Services licence no. 523351 (AFSL), so CAFX is regulated by the Australian Securities and Investment Commission (ASIC) and, and although ASIC is a strictly regulatory body, it does not endorse a specific financial product. ASIC’s regulation of CAFX applies to all services under the financial licence held by CAFX, including the issuance of foreign exchange settlement, foreign exchange payments, foreign exchange risk control, hedging, market making and providing financial advice.3
