• Gold up $2 to $2026
  • WTI crude oil up $0.21 to $72.99
  • Shanghai Comp +2.5%
  • Nikkei 225 -0.2%
  • AUD leads, USD lags

You would be forgiven for thinking that a hawkish RBA was the main reason behind Australian dollar strength but I would lean more towards optimism that some help is coming from China. There have been a series of a headlines and a report saying that Xi will hear from regulators today. That's all in the countdown to the week-long holidays starting in China on Friday.

As for the RBA, the statement retained a hawkish bias so there was some reason for AUD buying. I thought Bullock tempered that a fair bit in the press conference as she talked about two-sided risks and getting to where the RBA could be more confident about inflation coming down and how that will make cuts possible.

Aside from China and the RBA, the Japan data was poor and reasons are starting to add up for the BOJ to leave policy where it is. That said, normalizing to 0% may be more about getting away from the extremes rather than a desire to tighten policy. In any case, JPY is up so far on the day as 148.60 proves tough to break.

In the background of the market so far today is some USD selling. Part of that may be global growth optimism and China stimulus but some is also back-and-fill after a big USD rally. Treasury yields are also 3-4 bps lower across the curve in early trading.

FX news wrap
Xi pump it