Australian one dollar coins
A handful of Australian one dollar coins is shown in Sydney, February 18, 2004. Reuters/Tim Wimborne

Bell FX Currency Outlook: Local business confidence will be key for the AUD, but the main focus today will be on China
CPI.

Australia: The prospects of higher US and China growth fears weighed on markets overnight on a quiet night for data. The AUD/USD consolidated post-payrolls with marginal gains recorded against the USD. However, the OECD downgraded global growth forecasts, citing ‘deep concern’ over global trade, a clear warning for open trade related currencies such as the AUD. Today we have NZ card retail spending data for October at 08:45 AEDT and weekly ANZ-Roy Morgan consumer confidence at 09:30, the market will be focusing on the NAB Business Survey for October at 11:30. (There is also ABS Housing finance
approvals at 11:30 and Japan’s current account figures at 10:50 AEDT.) The Australian data is followed at 12:30 by China’s CPI/PPI October numbers, though these aren’t expected to be especially market moving with inflation subdued and not presenting any impediment to further Chinese economic policy easing.

Majors: Comments by the Fed’s Evans and Rosengren were of a similar ilk to recent Fed comments in leaving the door open to a December hike, but emphasising a gradual tightening path. Evans would still prefer to wait longer before increasing rates, he is not inclined to oppose a December move. Whilst Rosengren said that the Fed should raise rates if the economy continues its gradual improvement. Moving in moderation thereafter, however, may be required in order to analyse the reaction in financial markets and in the real economy. In its half yearly Economic Outlook released overnight, the OECD forecasts the world economy to grow 2.9% this year and 3.3% next, revised down from 3.0/3.6% in September on emerging market weakness, Russia and Brazil in recession and China soft. For Australia, the OECD predicts 2.2% growth this year, picking up 2.6% in 2016 and 3% in 2015.

Economic Calendar 10 NOV

  • AU NAB Business Confidence/Conditions Oct
  • AU Home Loans Sep
  • CH CPI/PPI Oct
  • US Wholesale Inventories Sep

Bell Fx

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