Good Morning,
Market Headlines
First-tier events kick-start with RBA then US elections, RBA will likely slash rates to a record 0.1%, could also expand QE (by AUD100 billion.). All eyes on the US election, mail-in voting has already finished but people have time to go to voting extensions throughout Tuesday. The first results will come on Wednesday at around 0:30 GMT. US equity sentiment improved, the S&P500 currently up 0.5%. Commodities, Brent crude oil futures rose 1.7% to $38.60, copper rose 0.8%, iron ore rose 0.4% to $118.35, and gold rose 0.7%.
Currency
AUD/USD: 0.6990 – 0.7053 (three-month low)
EUR/USD: 1.1622 – 1.1656 (one-month low)
GBP/USD: 1.2854 – 1.2942
USD/JPY: 104.64 – 104.95
USD/CAD: 1.3232 – 1.3343
NZD/USD: 0.6590 – 0.6634
AUD/JPY: 73.21 – 73.94
AUD/NZD: 1.0607 – 1.0640
AUD Thoughts
Market expects the RBA cash rate; 3-year bond rate target; and TFF rate to be lowered to 0.10%. The bond purchase program will also be expanded. The AUD is highly likely to sensitive to the US election with US equities expecting an intermittent dip as the saga plays out which can pose downside risks for AUD, before a relief rally eventually takes hold when the political dust finally settles.
AUD has rebounded from a three-month low (0.6990) in offshore trade as oil and trade-related headline shorts were flushed-out. The market will offers from yesterday’s 0.7070 highs initially and then in the 0.7140/60 region.
Event Risk Data Today
Australia: The RBA will hold its November policy meeting. Market expects the cash rate; 3-year bond rate target; and TFF rate to be lowered to 0.10%. The bond purchase program will also be expanded. VIC will observe Melbourne Cup Day.
US: Throughout the day, all eyes will be on the 2020 US Presidential Election. Results are expected to start coming in Wednesday around midday ADST.
US: Factory orders have been supported by transport and electronic orders in recent months (prior: 0.7%, market f/c: 1.0%).