The US$ has come under heavy selling pressure on Thursday, on all fronts, beginning in Asia and remaining fairly relentless throughout the day and ending at session lows against most counterparts. The Aud$ initially led the charge after the better than expected Trade Balance yesterday, with Sterling then taking over after a UK official said London was close to agreeing a deal with the EU, giving UK-based financial services firms basic access to EU markets, although the chance of an imminent deal was later played down by both the British Government and EU officials. Mark Carney added to the bullish bias for Cable after the BoE had left interest rates on hold, hinting at a slightly faster rate hike path if Brexit goes smoothly. The BOE sent a more hawkish-than-expected message to the market in reiterating a “gradual and limited” monetary stance but indicating that more rate hikes might be needed as there could be overheating in the UK economy in 2H 2019.
In other markets, the metals rallied strongly (Gold; +1.6%) on the back of the softer dollar while WTI is lower again (-2.74%), seemingly on the back of a presidential memorandum on Wednesday in which Donald Trump stated that there is sufficient supply of petroleum from nations other than Iran to permit a reduction in purchases from Tehran. Signs of increased US production also helped push WTI lower.
US stocks rose for a third day, +1%, as investors greeted the latest batch of earnings optimistically amid signs that the Trump administration will ease its trade war with China.
Friday will start with the Australian September Retail Sales (exp 0.3%mm) and Q3 PPI (exp 0.2%qq) and will be followed in Europe by the October EU Mfg PMIs and the UK Construction PMI. The main focus of the session will be the US Jobs/NFP/Average Hourly Earnings (exp 3.7%, +190K, AHE 0.2%mm,3.1%yy). Note that a bunch of economists surveyed by the WSJ expect that today’s jobs report will show that average hourly earnings for private-sector employees rose at better than 3% annualised in October, and would be the first time that the AHE has topped 3% since 2009.Have a good weekend.
Economic data highlights will include:
Fri: Australian Retail Sales, PPI, EU Mfg PMIs, US Jobs/NFP/Average Hourly Earnings data
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