The Australian dollar did next to nothing in overnight trade, meandering in a minuscule 30-pip range as investors stayed on the sidelines before of a series of major market-moving events later this week, beginning in earnest today.
As at 7.50am AEDT, the AUD/USD buys .7607, almost unchanged from Friday’s closing level.
While the Aussie did nothing on Monday, that all looks set to change today — it’s an absolutely epic data calendar, comprising two major central bank policy announcements along with a series of major economic data releases, including from China and the US.
And, of course, an entire nation pausing to watch the Melbourne Cup at 3pm AEDT.
Domestically, markets will receive the Ai Group’s manufacturing PMI for October, the weekly ANZ-Roy Morgan consumer confidence index along with CoreLogic’s monthly house price index.
The first two will be released at 9.30am AEDT with the latter following 30 minutes later.
Then, at 2.30pm AEDT, the Reserve Bank of Australia will announce its November monetary policy decision.
While financial markets have all but discounted the prospect of a further rate cut being delivered, Rodrigo Catril, currency strategist at the NAB, believes that the event will still prove to be market-moving for the Aussie.
“Although the RBA is widely expected to remain on hold this afternoon with the market pricing a 5% probability of a rate cut and most economists including NAB’s tipping a no change, the post meeting statement will be closely scrutinised for any signs of an easing bias, particularly given the low core inflation print in Q3 and the disappointing September labour force report which showed a trend slowdown in the rate of employment growth,” he wrote on Tuesday morning.
“So the risk is the RBA steps up its dovish rhetoric, the market is pricing just 12bps of rate cuts over the coming year and a month ago pricing was at 22bps, suggesting there is scope for repricing.
“Similarly the AUD could come under some pressure, however a break below the 0.745-0.775 range held since July this year looks unlikely to be tested.”
For those looking for further information on the RBA decision before it arrives, this 10-second guide will help bring you up to speed.
Outside of the domestic data calendar, the rest of the day is interspersed with major economic data from China, along with the Bank of Japan’s November monetary policy decision, something that could potentially overlap with the RBA.
Official manufacturing and non-manufacturing purchasing managers’ indices (PMIs) from China will be released at Midday AEDT. That will be followed 45 minutes later by the release of the separate Caixin-Markit manufacturing PMI, a private sector survey that look at activity levels for smaller manufacturers in China.
Then the BOJ rate decision will hit, potentially arriving at any point from 2pm AEDT onwards.
“As for the BOJ a no change to the bank’s policy setting is unanimously expected, however the market will be looking to see if the inflation target gets pushed further out in time,” says Catril.
Later in the session, markets will get a series of PMI reports from Europe, the UK and US. US construction spending figures for September will also be released.
A truly epic economic events calendar, and one the lays the foundation for equally busy days ahead.
Here’s the current Aussie dollar scoreboard as at 7.50am AEDT.
- AUD/USD 0.7607 , 0.0012 , 0.16%
- AUD/JPY 79.73 , 0.26 , 0.33%
- AUD/CNH 5.1551 , 0.0071 , 0.14%
- AUD/EUR 0.6926 , 0.0019 , 0.28%
- AUD/GBP 0.6213 , -0.0013 , -0.21%
- AUD/NZD 1.0633 , 0.0029 , 0.27%