- RBI intervention to sell US dollars against INR
- AUD/USD is lower after the RBA 'on hold' policy decision and less hawkish rhetoric
- Reserve Bank of Australia leaves the cash rate unchanged at 4.35%, as expected
- Driving stock market volatility: Morgan Stanley warns of fluctuations mid rate cut hopes
- A break of the range of estimates for ISM Services PMI should prompt extended market move
- BlackRock's CIO Rieder says the Fed Funds rate is too restrictive today, sees mid-24 cut
- China data - Caixin Services PMI for November 51.5 (expected 50.8)
- PBOC sets USD/ CNY central rate at 7.1127 (vs. estimate at 7.1476)
- Australian Q3 current account balance shows surprise deficit vs. a large surplus expected
- Japan data: Final November Jibun Bank Services PMI: 50.8 (prior 51.6)
- PBOC is expected to set the USD/CNY reference rate at 7.1476 – Reuters model
- UK BRC Sales Like For Like in November +2.6% y/y (exp +2.5%)
- New Zealand data: ANZ Commodity Price Index for November -1.3% m/m (prior 2.9%)
- ICYMI - Mark Zuckerberg sold Meta shares for the first time in two years
- USD/JPY has ticked higher after Tokyo inflation data
- Tokyo area CPI data for November 2023 comes in way above the 2% BOJ target rate. Again.
- South Korea November CPI -0.6% m/m (expected -0.15%)
- ICYMI: OPEC+ oil supply cuts can “absolutely” continue past Q12024 said Saudi oil minister
- Australia Consumer Confidence dip to 76.4: ANZ citing significant inflation changes needed
- Australian November Services PMI 46.0 (prior 47.9)
- New Zealand data shows non-residential building activity down in September quarter.
- Forexlive Americas FX news wrap: US factory orders slump but the dollar bounces
- Trade ideas thread - Tuesday, 5 December, insightful charts, technical analysis, ideas
- US stock market starts the week on a downturn
It was a busy day in Asia on Tuesday with a couple of inflation data releases leading. South Korea was first, with its November CPI. South Korean data does not often get a mention in the wrap but today’s release showed the m/m headline CPI with its sharpest drop, -0.6% m/m, since October 2020. The core rate recorded its slowest y/y rise since March 2022.
For Japan we then had Tokyo area inflation for November. All three inflation indicators for the month remained well above the Bank of Japan's 2% target but they all dropped from the October reading and all also came in under central estimates.
USD/JPY had a few minor swings in a 30 or so point range but as I update its little net changed (down a little) on the session circa 147.10.
From China today was the privately surveyed Caixin/S&P Global Services purchasing managers' index (PMI). It hit a three-month high of 51.5 in November, well up from October's 50.4. All of the Caixin PMIs (manufacturing, services, and composite) registered solid expansiona in November.
And so to the final Reserve Bank of Australia monetary policy decision of the year, with the Bank leaving its cash rate unchanged at 4.35% and issuing a less hawkish, even dovish, Statement from Governor Bullock. The key final paragraph read like a Bank low on conviction that it has much idea of what might lie ahead:
- Whether further tightening of monetary policy is required to ensure that inflation returns to target in a reasonable timeframe will depend upon the data and the evolving assessment of risks. In making its decisions, the Board will continue to pay close attention to developments in the global economy, trends in domestic demand, and the outlook for inflation and the labour market. The Board remains resolute in its determination to return inflation to target and will do what is necessary to achieve that outcome.
The Bank is now on a summer break and is awaiting the next official quarterly inflation data due on January 31 2024. The next RBA meeting follows closely after on February 5 and 6. That meeting is ‘live’ at present.
The Australian dollar was marked lower after the RBA announcement. NZD/USD had been on the heavy side for the session and it was dragged down further with the Australian dollar. As I post levels are around 0.6580 and 0.6150 respectively.
EUR/USD, GBP/USD, USD/CHF are all little changed.
Cad has joined its antipodean dollar friends, weakening on the session with USD/CAD circa 1.3557 as I update.
Gold rallied back above USD2040 while BTCUSD is around USD41.8K.
Still to come on Tuesday, at 10am US Eastern time, is the eagerly awaited ISm Services PMI. This should precipitate volatility and as for direction, check out the 'ranges' post above.
