5th October 2020 - Quiet day ahead on the economic calendar, preparing for RBA tomorrow


Good Morning,

Market Headlines

Global sentiment was mixed with European markets initially trading lower on Trump’s coronavirus announcement. US markets went on to stabilise with Pelosi’s positive comments on the fiscal support bill. The US jobs report was mixed. The crude oil sell off continued, Brent futures closing -4.1% at $39.27/bbl but copper managed a 3.9% gain in US trade, having hit lows since mid-August. Gold had been falling before the Trump news, reaching $1890/oz, bounced to above $1915 but then faded to back under $1900, net -0.3%.

Currency

AUD/USD: 0.7140 – 0.7175

EUR/USD: 1.1699 – 1.1742

GBP/USD: 1.2864 – 1.2952

USD/JPY: 105.04 – 105.39

USD/CAD: 1.3295 – 1.3331

NZD/USD: 0.6614 – 0.6650

AUD/JPY: 75.05 – 75.56

AUD/NZD: 1.0781 – 1.0803

AUD Thoughts

It’s a relatively quiet week ahead on the economic calendar. Tomorrow, business confidence figures are in focus ahead of August trade data on Tuesday. The main event of the week, however, will be the RBA’s interest rate decision tomorrow. Economic data has been largely positive since the last meeting, which should leave the RBA promising support if needed.

AUD/USD was slightly lower to close off trading at 0.7163. Demand remains at 0.7100 while offering interest is expected to have grown above 0.7240.

Event Risk Data Today

Australia: NSW, ACT and QLD observe public holidays. The MI inflation gauge has remained subdued since Covid, with headline inflation expectations +1.3%/yr in August.

New Zealand: ANZ commodity prices are expected to be a touch stronger over the month in September (prior: -0.9%).

Europe: Markit’s September services PMI is likely to highlight the risk reimposed restrictions pose to services spending (prior: 47.6). Retail sales to face further pressure after weakening 1.3% in July. The Sentix investor confidence index has been steadily improving despite uncertainty surrounding the medium-term economic outlook (prior: -8).

US: Markit services PMI (prior and market f/c: 54.6) and ISM non-manufacturing index (prior: 56.9, market f/c: 56.3) are firmly in expansionary territory.

The FOMC’s Evans (01:45 AEST) and Bostic (06:15 AEST) will speak

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