The US mid-term election results have seen the US$ remain under some pressure heading into Thursday trade, while stocks are up by 1.7% (S+P) to 2.3% (Nasdaq). Stocks have been assisted through the day as US yields slipped, although they have since recovered to sit slightly below the previous session’s close (US10Y; 3.211%, 30Y; 3.419%).
Back in the FX space, the Yen remains under some pressure due to the return of a more positive risk appetite, while the Euro is also looking a little heavy, heading into the Asian session. The best performers have been the Aud and the Kiwi, the latter being also boosted yesterday by the very strong job data which may point towards the RBNZ turning less dovish in the upcoming rate decision.
In other markets, the metals remained choppy but rangebound while WTI had a volatile session after OPEC suggested it was ready to cut output in a bid to shore up a market that had lost 20% of its value in the past five weeks. This created a sharp rally ahead of the EIA announcing a weekly crude output of 11.6 million barrels per day, as well as a seventh-straight weekly rise in US crude inventories, with stockpiles growing by 5.8 million barrels last week vs forecasts for a 2.4 million increase, sending the price sharply lower in the process..
Thursday will begin with the RBNZ Interest Rate Decision (This just took place – rates left unchanged- as expected) and, as above, after yesterday’s jobs report they may well be a bit more positive than they have in recent meetings although no change to policy is expected this month. Following on closely from that, we get the RBA Monetary Policy Statement and the China Trade Balance (exp $35 Bio, Exports +11%, Imports +14%). Europe will then be relatively quiet (German Trade Balance; exp +€18 bio), with the main focus of the day being on the FOMC Meeting, where, although no change to policy is expected, a December hike is more or less written in.
Economic data highlights will include:
Thur: RBNZ Meeting/Interest Rate Decision, Japan Current Account, Machinery Orders, Eco Watchers Survey, China Trade Balance, German Trade Balance, EU Economic Bulletin/Growth Forecasts, FOMC Meeting/Interest Rate Decision.
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