Today is the first RBA meeting under new Governor Lowe. While he isn’t expected to announce any changes to interest rates his first time out, traders may look to the statement for any signs of continuity versus change. In particular, is Governor Lowe still open to cutting interest rates further, or is he more neutral? Also, traders may look to see if he is going to be as active in trying to talk down the dollar or if he favours a more hands-off approach. Ahead of the news, both the S&P/ASX and AUD have been advancing.
US markets finished the day down moderately. It was a holiday Monday in Germany so there were no new developments in the Deutsche Bank situation. US economic data was mixed with positive PMI (particularly the new orders component) back above 50 and above expectations offset by a big drop on US construction spending. Tesla Motors gained 5% after the electric vehicle announced Q3 deliveries of 24,500 vehicles well above street expectations.
has been the top performing major index on the day, boosted by a combination of a falling Pound and manufacturing PMI that came in well above expectations. There still appears to be a disconnect in expectations from markets apparently worried Brexit may harm the UK economy and UK economic data showing the situation so far has turned out to be quite the opposite with the UK economy benefitting dramatically from the lower Pound.
Crude oil continues to climb on speculation OPEC countries could finalize a production freeze/cut deal in November with falling US inventories also supporting the market. CAD and MXN have been climbing in tandem with WTI. MXN could be particularly active though the Asia Pacific session with the US Vice Presidential Debate being held today. As a reflection of the antagonism toward Mexico coming out of the current election cycle, MXN has been active lately contrasting the ups and downs of the Trump campaign.
There have been no major announcements after the US close today
Significant announcements released overnight include:
US construction spending (0.7%) vs street 0.3%
US construction spending previous revised down to (0.3%) from 0.0%
Manufacturing PMI reports:
US Markit PMI 51.5 vs street 51.4
US ISM PMI 51.5 vs street 50.3 vs previous 49.4
US ISM new orders 55.1 vs previous 49.1
Canada RBC 50.3 vs previous 51.1
UK Markit 55.4 vs street 52.1
Germany Markit 54.3 vs street 54.3
France 49.7 vs street 49.5
Italy 51.0 vs street 50.3 and previous 49.8
Spain 52.3 vs street 51.5
Sweden 54.9 vs street 52.0 and previous 50.7
Norway 52.6 vs street 52.3
Poland 52.2 vs street 52.1
Greece 49.2 vs street 50.8
Upcoming significant economic announcements include:
(Note: 11:30 am in Sydney/Melbourne is currently 1:30 pm in Auckland, 4:30 pm in Vancouver, 7:30 pm in Toronto/Montréal, 12:30 am in London and 8:30 am in Singapore)
2:30 pm AEDT Australia RBA interest rate 1.50% no change expected
8:00 pm AEDT India RBI repurchase rate 6.50% no change expected
10:00 am AEDT NZ QV house prices previous 14.6%
11:30 am AEDT Australia building approvals street 5.1%
4:30 pm AEDT Australia commodity index previous 0.8%
8:00 am BST Spain unemployment change street 23K
9:30 am BST UK construction PMI street 49.0 vs previous 49.2
8:05 am EDT FOMC Lacker speaking
9:45 am EDT US ISM New York previous 47.5
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