23rd October 2020 - The final Presidential Debate from Nashville main draw card

Good Morning,

Market Headlines

The US Stimulus saga continues……House Speaker Nancy Pelosi said Democrats are “just about there” on a coronavirus stimulus deal with the White House, but also warned about a bill may take some time to pass Congress. The S&P500 is currently up 0.5%, and bond yields and risk sensitive currencies are higher. Commodities, Brent crude oil futures rose 1.8% to $42.50, copper fell 1.5%, iron ore is unchanged at $120.35, and gold fell 1.1%.


AUD/USD: 0.7093 – 0.7125

EUR/USD: 1.1812 – 1.1867

GBP/USD: 1.3071 – 1.3149

USD/JPY: 104.48 – 104.91

USD/CAD: 1.3125 – 1.3173

NZD/USD: 0.6656– 0.6688

AUD/JPY: 74.18 – 74.67

AUD/NZD: 1.0645 – 1.0672

AUD Thoughts

AUD eased below 0.7100 having bounced from 0.7085 earlier and managed to reverse previous losses returning to levels above 0.7100. RBA on track for a major policy loosening on November 3. There is quite a range of expectations but the RBA has made clear that a lower A$ would be a helpful by-product. This local headwind for the Aussie combines with a skittish mood in global equities, as agreement on US fiscal support remains elusive and the election draws closer, boosting volatility.

Look for rallies to fail into 0.7155/68 resistance, with 0.7000 to give way to 0.6965, which would be well received at the RBA

Event Risk Data Today

NZ: Market expecting a 0.9% rise in the CPI in Q3 mostly due to increased fuel prices and seasonal factors.

Japan: September CPI will be impacted by the government travel discount roll-off and weak oil prices (prior: 0.2%yr, market f/c: 0%yr). Travel restrictions and business closures have kept both the manufacturing and service PMIs in contractionary territory at 47.7 and 46.9 respectively, though ahead a recovery in South-East Asia should support demand.

Eurozone: The Markit manufacturing and service PMIs for the Eurozone and Germany will be released, with initial signs of a virus resurgence and government restrictions to weigh on business sentiment all around.

UK: Retail sales is expected to lose momentum in September and to the end of the year (prior: 0.8%, market f/c: 0.2%). Manufacturing and service activity is also set to decline in October, with services to bear the brunt of tighter restrictions (manufacturing – prior: 54.1, market f/c: 53.1 - services – prior: 56.1, market f/c: 53.9).

US: Markit PMIs are expected to remain expansionary in October (manufacturing – prior: 53.2, market f/c: 53.5 - services – prior and market f/c: 54.6).

US: The final Presidential Debate from Nashville, Tennessee will begin at 12:00 AEST/21:00 EST.