AUD/USD up first day in three
Consumer confidence in Australia fell to the lowest level since July 2015 in October, according to the latest reading by Westpac. Westpac’s consumer confidence index fell to 92.8 on October from 98.2 last month. In a related note, Westpac noted that the index has fallen 8.4% since the Reserve Bank of Australia began cutting rates in June.
Despite the weak data, AUD/USD rose 0.17% to 0.6740, potentially set to climb for the first time in three days. AUD/JPY jumped 0.25% to 72.24 with the 55-day moving average acting as the next resistance point at 72.70. That moving average has capped prices on a closing basis since September 18.
AUD/JPY Daily Chart
China shares rise most in four weeks
In other markets, Asia seems to have repeated yesterday’s direction, with indices rebounding from New York selling to post gains during the morning session. US indices were up between 0.25% and 0.30%, with the SPX500 index the out-performer this time. The China50 index put in a strong showing, gaining 1.13% despite the increase in tensions between the US and China ahead of the trade talks which are due to resume tomorrow.
In a broader reflection of a risk-on trade, gold edged lower and the yen was sold, losing 0.08% versus the US dollar and 0.17% against the Euro. The pound failed to make any headway as it still feels the pressure of a lack of progress on the Brexit deal front. GBP/USD hit the lowest since September 4 yesterday and is now at 1.2216.
GBP/USD Daily Chart
Will Powell repeat his non-QE comment?
In a speech yesterday, Fed Chairman Powell said he thought the current expansion in the US economy “feels very sustainable” but at the same time noted that “clearly things are slowing a bit”. Powell also used his speech to inform the market that the central bank would soon begin to expand its balance sheet to ensure smoother functioning of the US short-term funding market.
The view is that the Bank will start buying Treasury Bills to replenish reserves and Powell was quick to point out that this technical operation was in no way another round of quantitative easing. Powell is scheduled to speak again later today ahead of the release of the minutes of the last Fed meeting, where they trimmed rates by 25 bps.
The full MarketPulse data calendar can be viewed at https://www.marketpulse.com/economic-events/