Markets were enthused that there re-ongoing Congressional talks over putting together another coronavirus stimulus package. US data was plentiful as well, and the mix of politics and assessments of the US economy made for a turbulent session for the first day of the new month and quarter. Meanwhile, the Dow added 0.13%, the S&P 500 gained 0.53 and the Nasdaq added 1.42%. US 2yr treasury yields roundtripped from 0.13% to 0.14% and back, while the 10yr yield fell from 0.70% to 0.67% via 0.72%, the mixed economic data causing some volatility. Commodities, Brent crude oil futures fell 4.0% to $40.60 and copper fell 5.8% to a two-month low - both affected by concerns about the US economy, while gold rose 1.1%.
AUD/USD: 0.7162 – 0.7209
EUR/USD: 1.1723 – 1.1770
GBP/USD: 1.2819 – 1.2979
USD/JPY: 105.45 – 105.73
USD/CAD: 1.3266 – 1.3321
NZD/USD: 0.6621 – 0.6655
AUD/JPY: 75.64 – 76.05
AUD/NZD: 1.0801 – 1.0847
- AUD/USD stays a bit shy of 0.7210, highest in eight days, flashed the previous day.
- Brexit, pre-NFP cautious mood probe the risk-takers amid broad US dollar weakness.
- Australian Retail Sales can offer immediate direction, risk catalysts will be the key.
Looking forward, Australia’s September month Retail Sales, expected to confirm a -4.2% preliminary forecast, can offer immediate direction to AUD/USD ahead of the long US session. It’s worth mentioning that the absence of Chinese players with Golden week and the pre-NFP trading lull may restrict the market moves.
A confluence of 21-day and 50-day SMA, currently near 0.7206/12 restricts the pair’s upside momentum towards a falling trend line from September 01, at 0.7281 now. Meanwhile, the August 20 low near 0.7130 can offer immediate support during further downside ahead of 100-day SMA near 0.7030.
Event Risk Data Today
Australia: Retail Sales market expects the final estimate to confirm a 4.2% fall in the month.
NZ: Consumer confidence continues to be weighed down by virus woes (prior: 100.2).
Euro Area: In September, the CPI is expected to partially recover August’s 0.4% fall with a 0.2% gain.
US: Employment growth is expected to slow further in September, though the monthly gain for nonfarm payrolls is still expected to be around 950k (prior: 1371k, market f/c: 868k). The unemployment rate is expected to steady, only edging lower from 8.4% to 8.2%. Labour market slack will continue to place pressure on wages; average hourly earnings is expected to post a modest gain in September(market f/c: 0.2%). September Uni of Michigan consumer sentiment is expected to remain broadly unchanged, having lagged activity data (prior: 78.9, market f/c: 79.0).
FOMC’s Harker (23:00 AEST) and Kashkari (03:00 AEST) will speak.