AUD: The RBA maintained interest rates at 0.75% overnight, while the accompanying statement was left relatively unchanged from the prior month. Consequently, the Aussie saw a muted reaction on the release, before edging higher amid the continued reduction in trade war fears. Looking ahead, the RBA will deliver its Statement on Monetary Policy at the end of the week with the central bank potentially shedding more light on the near-term outlook. That said, money markets have only priced in 5bps of easing by the December meeting, suggesting that the RBA is likely on a short-term pause. On the technical front, gains in AUD/USD may soon come to a halt as the pair edges towards the descending trendline from the Dec’2018 peak, which also roughly coincides with the 200DMA.
EUR: The Euro is on the defensive having broken below the 1.11 handle as the greenback tracks US yields higher. That said, key support in the near-term in the pair is situated at 1.1070, which represents last week’s low. Looking ahead, focus is on the ISM Non-Manufacturing PMI.
JPY / CHF: Reports this morning via the FT also noted that the White House may consider rolling back levies on $112bln of Chinese imports as a concession to seal a partial deal. Consequently, safe-havens are out of favour with both the Japanese Yen and Swiss Franc the underperformers in the G10 space. USD/JPY making another test of the 200DMA (109.02).
Source: DailyFX, Refinitiv
Economic Calendar (05/11/19)
WHAT’S DRIVING MARKETS TODAY
- “VIX Record Short Signals Market Complacency, Raising Risks of a VIX Blowout” by Justin McQueen, Market Analyst
- “Crude Oil Technical Outlook – Short-term Bullish, but Could Change Soon” by Paul Robinson, Currency Strategist
- “Gold Price Outlook Breaking Down – Is Bullish Momentum About to Crack?” by Nick Cawley, Market Analyst
— Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.firstname.lastname@example.org
Follow Justin on Twitter @JMcQueenFX