It has been a fairly slow start to the week, with the US$ trading a little lower by soft bond yields, and with Cable leading the way higher. The Euro is pretty much unchanged after recovering from a heavy start that saw it test the October lows. The main action has been in oil, where WT|I is up by around 3%, reaching its strongest level since July 2015, underpinned by Saudi Arabia’s crown prince, who has cemented his power over the weekend with an anti-corruption crackdown. Gold is up $9 oz as the political uncertainty in the Middle East fuelled some safe-haven demand. Stocks are mildly higher again, at yet new all-time highs, driven largely by the NASDAQ which continues to be underpinned by the large tech stocks.
Tuesday will get off to a busy start, with the RBA Interest Rate Decision leading the way, although no change is expected for the 15th month in a row. Given the rather look of the data that we are receiving in Australia, many more months of the same would not surprise. While the Labour market data remains underpinned, the CPI remaining sub-target and retail sales continue to contract, so don’t expect anything different from the RBA any time soon. In other data that may impact on the $AUD today, the AIG Performance of Construction Index and the China Foreign Exchange Reserves will be released. From then on the calendar goes rather quiet, with the German Industrial Production and EU Retail Sales the only real items on the agenda with little to come from the US; just the Consumer Credit Change for September. Elsewhere, Kiwi traders will want to look out for the Global Dairy Trade Index (midday London), while WTI traders will look to the API Weekly Crude Oil Stock Inventory for guidance.
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