Markets:

  • Gold up $15 to $2671
  • WTI crude oil down $2.27 to $67.42
  • US 10-year yield up 1.5 bps to 3.79%
  • S&P 500 up 23 points to 5745
  • AUD leads, JPY lags

The market is buzzing with talk about China stimulus as the politburo pledged to deploy the "necessary spending" to spark 5% GDP growth this year and delivered some funds to big banks for lending. That has the market increasingly convinced that the fiscal support will follow the monetary support announced earlier in the week.

In turn, the Australian dollar was a standout today and market watchers are re-evaluating the path of global growth in the year ahead. AUD/USD so far hasn't broken the mid-week high but it recovered from yesterday's China doubts. There are big implications for global growth if China picks up and the market is increasingly optimistic.

The kneejerk so far has been to sell the US dollar and that had the pound climbing to the highest since 2022 in a brief pop above Tuesday's high. Less enthusiastic was the oil market as it fell 3% following an FT report that hinted that Saudi Arabia has given up on $100 oil and may fight for market share instead.

The yen was softer today but more-subdued that normally as the market buckle's down for Friday's LDP leadership vote. The new Prime Minister will could re-set the agenda for the domestic economy and lean on the BOJ on rates. Expect a bigger move on Friday and watch out for US PCE data later.

FX news wrap Sept 26