Aussie surges on strong jobs data
Jobs growth beats estimate
Australia added a net 32,800 jobs in October, beating estimates of a 20,000 increase. Adding emphasis to the headline, 42,300 full-time jobs were added, the most since February, with a loss of 9,500 part-time jobs. Unemployment held steady at 5.0% despite an uptick in the participation rate to 65.6% from 65.4%.
The knee-jerk reaction was to push the Aussie higher, with AUD/USD reaching 0.7283, a one-week high, while AUD/JPY hit 82.76. AUD/USD looks poised to close above the 100-day moving average for only the second time since March 15 today.
AUD/USD Daily Chart
US dollar gives up some ground
The US dollar edged marginally lower during the Asian session as US 10-year yields drifted toward 2-1/2 week lows at 3.12%. CPI numbers that met forecast for October yesterday has seen the probability of a Fed December rate hike dip to 71.8% from 75.5% early yesterday. The PBOC set the USD/Yuan fix lower for a second consecutive day which prompted a 0.1% decline for USD/CNH.
Pound shrugs off the Brexit deal
After long negotiations, a Brexit deal (compromise?) was announced late yesterday. While UK PM May assured that it was the best they could get, the rumour mill is now running rife in London with talk of ministers’ resignations and even a challenge to PM May’s leadership doing the rounds. There certainly appears to be even more uncertainty and volatility ahead for the pound. Either way, after the wild swings seen yesterday, the pound had a settled morning in Asia, holding in a tight range below the convergence of the 55-and 100-day moving averages at 1.3029.
GBP/USD Daily Chart
Retail sales in the spotlight
Today’s data calendar offers up retail sales for both the UK and the US, both of which are expected to show a rebound from September’s weak numbers. For the UK, the increase is seen as +0.2% m/m after a 0.8% slump the previous month, while the US is expected to show expansion of 0.5% from 0.1%.
Aside from retail sales we have central bankers in front of the microphone, with ECB’s Coeure and Fed’s Quarles, Powell and Bostic all scheduled.
The full MarketPulse data calendar can be found at https://www.marketpulse.com/economic-events/