Overnight Market & Currency Developments – From Our Bankers

Overnight Developments:

  • USD eased a bit overnight mostly versus GBP and EUR. The U.S bond market was closed Monday for Columbus Day holiday and the U.S. economic calendar was empty. Thursday’s FOMC September meeting minutes is the next USD focus. We expect the minutes to reinforce the case for a December Fed funds rate hike which is USD supportive. December Fed funds futures already imply an 80% probability of a 25bps Fed funds rate increase.
  • AUD/USD traded within a narrow range overnight. Today in Australia we expect the September business confidence survey (11:30am Sydney) to remain consistent with encouraging economic conditions. On the RBA speaker front, Deputy Governor Guy Debelle speaks at the FX Global code of conduct (2:20pm Sydney). Globally, favourable economic activity will continue to underpin firmer commodity prices and support AUD. The October IMF World Economic Outlook (00:00 Sydney) is expected to confirm that global growth is improving and becoming more broad‑based.


Overnight Data:

  • The US employment trends index eased from 132.78 to 132.74 in September.


Global Equity Markets:                                                                                                                  

  • European share markets were mixed again on Monday.  The Spanish IBEX index rebounded by 0.5% with investors encouraged by a demonstration in Barcelona against independence.  Shares in Caixabank rose 1.4% after its board agreed to move its head office to Valencia. Shares in Airbus fell 2.3% after its chief executive warned a corruption investigation could lead to large corporate penalties. The STOXX 600 rose by 0.2% and the German Dax also rose by 0.2% while the UK FTSE fell by 0.2%. In London trade, shares in Rio Tinto fell by 2.2% while BHP fell by less than 0.1%.
  • US share markets ended lower on Monday with the Columbus Day holiday trimming trading volumes. Declines in healthcare stocks were offset by gains in the technology sector. Investors are awaiting key economic data later in the week and also waiting for the third‑quarter earnings season to begin in earnest. The Dow Jones fell by almost 13 points or 0.1%, the S&P 500 fell by 0.2% and the Nasdaq fell by 10.5 points or 0.2% from record highs.



  • Global oil prices rose slightly on Monday. Reuters reported: “OPEC Secretary‑General Mohammad Barkindo said on Sunday consultations were under way for an extension of the agreement beyond March 2018 and that more oil‑producing nations may join the pact, possibly at next month’s meeting.il supply agreement.” Also, US production started to return to normal in the Gulf of Mexico with the passing of Hurricane Nate. Brent crude rose by US17 cents or 0.3% to US$55.79 a barrel. US Nymex rose by US29 cents or 0.6% to US$49.58 a barrel.
  • Base metal prices rose by up to 3.9% on the London Metals Exchange with nickel up the most. Other metals rose up to 1.1% while lead lost 0.8%.
  • The spot gold price rose. It was trading around US$1,284 an ounce in late US trade, up around US$9 an ounce on the day. Iron ore fell by US10 cents to US$61.60 a tonne.



  • In Australia, the NAB business survey is released with weekly consumer confidence data. The Reserve Bank Deputy Governor delivers a speech.
  • In the US, the NFIB business optimism index is released with weekly chain store sales data.
  • The IMF will release updated global economic forecasts which should show a more upbeat view.


Indicative Rates (Bank to Sell):

AUD / USD 0.7704 AUD / CAD 0.9591 USD / JPY 112.64
AUD / JPY 86.40 AUD / THB 24.97 GBP / USD 1.3146
AUD / EUR 0.6546 AUD / HKD 5.9536 NZD / USD 0.7065
AUD / GBP 0.5836 AUD / SGD 1.0490 NZD / EUR 0.6017
AUD / NZD 1.0890 AUD / FJD 1.5614 AUD / CNY 5.1045
AUD / CHF 0.7396 AUD / PGK 2.4331 All Ordinaries 5805.14
AUD / DKK 4.8607 EUR / USD 1.1591 Gold $US/oz 1284.30
AUD / SEK 6.2446 EUR / GBP 0.8931 Oil WTC $/b 49.53



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