AUD Slips as China Retaliates; Wall St. Ends Mixed on Softer Yields

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Forex Market 

USD: Mixed Wall St. Session; AUD Dips on China’s Retaliatory Measures

Wall Street ended mixed overnight as trade tensions resurfaced after China imposed restrictions on five U.S. units of Hanwha Ocean in response to U.S. tariff threats.
The Dow Jones gained +0.9%, S&P 500 +0.3%, while the Nasdaq slipped -0.2%. U.S. 10-year yields eased to 4.02%, and Brent Crude declined 1.2% to $58.70/bbl.
The AUD/USD traded between 0.6440–0.6521, settling near 0.6490 ahead of the Asian open, pressured by renewed USD strength and risk aversion.

 

  • AUD/USD fell to lows of 0.6449 after China’s retaliatory measures, while demand remains around 0.6420 with resistance near 0.6530.
  • AUD/NZD traded between 1.1305–1.1418, while NZD/USD held 0.5717–0.5758.
  • EUR/USD rose to 1.1615, GBP/USD traded at 1.3249, and USD/CAD hovered near recent highs.

 

Focus today turns to sentiment surrounding U.S. banks, with U.S. Building Permits and Housing Starts data also due for release.

Key Economic Data Ahead (Sydney Time)

 

General Market

Wall Street
  • Dow Jones +0.5% to 46,191
  • S&P 500 +0.5% to 6,664
  • Nasdaq +0.5% to 22,680
  • VIX -16.0% to 21.26
Asia-Pacific
  • ASX 200 -0.8% to 8,995
  • Shanghai Comp -2.0% to 3,840
  • Nikkei -1.4% to 47,582
Europe
  • FTSE -0.9% to 9,355
  • DAX -1.8% to 23,831
  • CAC -0.2% to 8,174

Headlines to Watch 

  • United States:
    The federal government remains shut down since October 1st, halting economic data collection and releases. Markets await clarity on a new release schedule once funding is approved.
  • New Zealand:
    CPI inflation for Q3 is expected to rise 1.1% q/q and 3.1% y/y (RBNZ: 3%). Food and local authority rates are likely to have driven the increase. The RBNZ will focus on non-tradables inflation, with particular attention to price stability indicators.
  • China:
    3Q GDP is due today, with forecasts for 4.5% YoY growth (consensus 4.7%, prior 5.2%). Slower fixed asset investment remains a concern. Policymakers may consider additional measures to reach the 5% annual target ahead of the upcoming 4th Plenum (Oct 20–23).
  • Canada:
    The BoC Business Outlook Survey is set for release, which could influence the rate decision later this month. Markets currently price in ~50% odds of a 25bps rate cut.

Mid-market rates

Currency PairMid-market Rate
AUD/USD0.6501
AUD/NZD1.1340
AUD/JPY98.07
AUD/CNY4.6321
AUD/EUR0.5575
AUD/GBP0.4840
AUD/HKD5.0504

 

 

 

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