US equities stalled at record highs, the S&P500 unchanged on the day. The defensive US dollar fell slightly, while bond yields rose further as markets priced in the prospect of reflating economies. Commodities, Brent crude oil futures rose 2.2% to $48.45, copper rose 0.2%, iron ore rose 2.8% to $136.55 – a fresh seven-year high, and gold rose 0.7%.
AUD/USD: 0.7351 – 0.7406
EUR/USD: 1.2040 – 1.2108 (three-year high)
GBP/USD: 1.3288 – 1.3441
USD/JPY: 104.43 – 104.75
USD/CAD: 1.2917 – 1.2958
NZD/USD: 0.7032 – 0.7084 (three-year high)
AUD/JPY: 76.81 – 77.31
AUD/NZD: 1.0429 – 1.0488
- AUD sentiment has taken a turn for the better, perhaps in a late reaction to Wednesday’s strong GDP numbers.
- AUD/USD came within a whisker of November highs at 0.7407.
AUD/USD continues to advance higher within the confines of a bullish trend channel. The uptrend support links the 13, 19, 23 and 30 November lows, while the uptrend resistance links the 9 October and 9 and 27 November highs. Thus, the pair’s technical bias remains to the upside, meaning a test of the November high at 0.7407 is likely soon. Should this level go, that would open the door for a near-immediate test of the 0.7414 September and year-to-date high
Event Risk Data Today
Australia: The market expects that October housing finance approvals will grow by 2%, with owner occupier loans (mkt f/c: 2.8%) likely to continue outperforming investor loans (mkt f/c: 1.2%). The trade balance should remain broadly stable at $5.8bn in October; underlying this, market expects that both imports and exports will advance by around 3.5%. The November AiG PCI will continue to be supported by housing construction – the survey recently printed above 50 for the first time since August 2018.
New Zealand: Market expects that building consents will fall by 5% in October. That follows a large number of apartment consents in September, which tend to be issued in lumps. That would still leave annual issuance at very high levels, signalling a strong construction pipeline as we head into the new year. November ANZ commodity prices will be published, with dairy prices stable over the month.
China: The November Caixin services PMI is set for another strong print as the sector benefits from the resurgence of household spending (market f/c: 56.4).
Euro Area: October retail sales will come under pressure as lockdowns inhibit consumer movement (market f/c: 0.7%).
US: Consecutive increases in initial jobless claims raise concerns around softness in the labour market (market f/c: 775k). The November ISM non-manufacturing index remains above pre-COVID levels, but is expected to retrace as the virus’ spread and capacity constraints hinder the recovery (market f/c: 55.8).