- The RBA raised cash rates as expected by 25 bps to 3.5%
- There was some questionable price-action in the 30 seconds before the announcement when the market fell by 20 pips
- Gold adds another $5 to $1065/oz
- NZ wage growth +0.4% in Q3
- Japanese financial markets were closed today
A very quiet session has been enlivened by some volatility in the AUD/USD after the RBA announced that it was raising rates by 0.25%. The pair fell by 20 pips in the 30 seconds immediately preceding the announcement giving the impression that someone knew what was going on. It has subsequently fallen further towards .9000 and AUD/JPY selling has also emerged giving the impression that the market must be almost limit long if it is falling after a rate rise.
Investment banks were visible early in the session buying both EUR/GBP and EUR/JPY. The EUR/USD moved higher with these flows from its NY closing level at 1.4770 to a high at 1.4810. Talk overnight was that China was selling at 1.4840 during the NY session and with Sovereign names also on the bid toward 1.4680, range trading is likely to continue in EUR/USD.
USD/JPY moved from 90.30 to 50 on the back of the cross flows but selling interest in the USD/JPY at 90.60 remained untested. The pair has since drifted slowly lower and is currently weighed under by AUD/JPY selling.
Cable has fallen consistently through the session with EUR/GBP buying the main culprit. Interest at current levels remains light. Good bids are expected in the cable at 1.6280/90 level.
Ranges: 1.4764/1.4810; cable 1.6354/1.6420; USD/JPY 90.15/49; AUD/USD .9007/91.
Markets: HK unch; Kospi -0.25%; Gold $1065/oz, Oil $78/bbl.
