Overnight Market & Currency Developments – From Our Bankers

Overnight Developments:

  • USD pared back some of its recent gains overnight and U.S. 10‑year Treasury yields are largely unchanged near 2.33%. There was no fundamental trigger for the softer USD.  The next major USD focuses are the U.S. September ISM non‑manufacturing PMI (Thu) and non‑farm payrolls report (Fri).  The ISM survey will continue to point at robust U.S. economic activity which is USD supportive. But we expect the non‑farm payrolls report to show hurricane‑affected job numbers while average hourly wage growth remains muted. This will further weigh on U.S. interest rate future and curtail USD upside.
  • AUD/USD recovered a little overnight on USD weakness and higher global equity markets. Today, CBA’s Australia PMI services and composite surveys (9am Sydney) should remain consistent with encouraging Australian economic activity. We do not expect much of a reaction from the AUD. Overall, we still expect AUD/USD to trade closer to 0.8000 by year‑end. Australia’s higher terms‑of‑trade, the structural improvement in Australia’s current account deficit, and positive real interest rates spread between Australian and the U.S. favour a higher AUD/USD.


Overnight Data:

  • The US ISM New York Purchasing Managers index fell slightly from 748.8 to 748.6 in September.  Chain store sales were up by 4.1% annualised for the week, having risen at a 4% annual rate the previous week. Major automakers recorded higher US new vehicle sales in September as consumers replaced flood damaged cars.


Global Equity Markets:                                                                                                                  

  • European share markets rose on Tuesday, remaining near record highs. Financials increased on the back of gains on Wall Street. British heating and plumbing products company Ferguson was a strong performer. The STOXX 600 rose 0.2%, the German DAX was closed (public holiday) and the UK FTSE lifted by 0.4%.  In London trade, shares in Rio Tinto rose by 1.1% while BHP rose by 0.6%.
  • US share markets rose to record highs on Tuesday, buoyed by the continuing rally in technology stocks. The share prices of automakers’ General Motors and Ford increased after both reported strong September sales. Markets traded in a fairly narrow range as traders awaited upcoming quarterly earnings. The Dow Jones index rose by 84 points or 0.4%, the S&P 500 was up by 0.2% and the Nasdaq rose by 15 points or 0.2%.



  • US oil prices fell marginally on Tuesday on investor profit taking. Traders are awaiting the weekly inventory data from the Energy Information Administration. Brent crude fell by US12 cents or 0.2% to US$56.00 a barrel. US Nymex fell by US16 cents or 0.3% to US$50.42 a barrel.
  • Base metal prices rose by up to 2.6% on the London Metal Exchange with lead increasing the most. Copper was relatively flat.
  • The December Comex gold futures price fell by US$1.20 or 0.1% to US$1,274.60 per ounce. The spot gold price was trading around US$1,272 an ounce in late US trade. Iron ore was unchanged at US$61.50 a tonne.



  • In Australia, the Commonwealth Bank’s Services and Composite Purchasing Manager Indices are released.
  • In the US, the ISM Services Index is out.


Indicative Rates (Bank to Sell):

AUD / USD 0.7786 AUD / CAD 0.9644 USD / JPY 112.88
AUD / JPY 87.50 AUD / THB 25.24 GBP / USD 1.3240
AUD / EUR 0.6614 AUD / HKD 6.0206 NZD / USD 0.7160
AUD / GBP 0.5855 AUD / SGD 1.0590 NZD / EUR 0.6098
AUD / NZD 1.0857 AUD / FJD 1.5918 AUD / CNY 5.1822
AUD / CHF 0.7428 AUD / PGK 2.4597 All Ordinaries 5764.19
AUD / DKK 4.9122 EUR / USD 1.1592 Gold $US/oz 1272.22
AUD / SEK 6.3197 EUR / GBP 0.8869 Oil WTC $/b 50.39



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