Overnight Market & Currency Developments – From Our Bankers

Overnight Developments:

  • AUD/USD has lifted on AUD/NZD buying, a modestly softer USD and market reaction to yesterday’s good Australian September labour force report. CNH has also strengthened in overnight trade after yesterday’s Chinese Q3 GDP expanded by 6.8%pa matching the consensus estimate and confirming a steady‑growing Chinese economy. In terms of the September monthly Chinese economic data, retail trade and industrial production were 0.1ppt stronger than consensus while fixed asset investment was 0.2ppt softer than expected. China’s 19th National Congress continues today.
  • NZD/USD has been under steady downward pressure all night with market participants responding to the outcome of the New Zealand election where the New Zealand First (NZF) party chose to join Labour in government with the Green party “providing supply and confidence”. The two coalition partners have 55 out of the required 61 seats in Parliament necessary to form a government. The Green Party has 8 seats, providing a 2‑seat parliamentary buffer via the supply and confidence agreement.

 

Overnight Data:

  • The US leading index fell by 0.2% in September (forecast +0.2%).  The Philadelphia Fed index rose from +23.8 to +27.9 in October.  New claims for unemployment insurance (jobless claims) fell by 22k in the latest week to a 44‑year low of 222k (forecast 236k).

 

Global Equity Markets:                                                                                                                   

  • European share markets eased on Thursday.  Investors were focussed on the ongoing political crisis in the Spanish Catalonia region.  Spain’s IBEX fell by 0.7%.  Unilever shares fell by 5.5%.  The broader European STOXX 600 index fell by 0.7%.  The German Dax fell by 0.4% and the UK FTSE lost 0.3%.  In London trade, shares in Rio Tinto rose by less than 0.1% and BHP rose by 0.5%.
  • US share markets ended mixed on Thursday with sentiment affected by media stories focussed on the 30th anniversary of the 1987 share market crash.  Shares in Apple also fell 2.4% on concerns over soft demand for the iPhone 8.  Shares in United Airlines fell 12.1% after it reported that profit was affected by recent hurricanes.  After being down 105 points at one stage, the Dow Jones ended up 5 points or less than 0.1%.  The S&P 500 rose by less than a point to record highs. But the Nasdaq lost 19 points or 0.3%.

 

Commodities:                                                                                         

  • Global oil prices fell on Thursday.  Some investors attribute the falls to higher US product inventories in the US as well as profit‑taking.  Reuters reported that “Iraqi Kurdistan’s oil exports more than halved to 200k bpd on Wednesday as the Iraqi military retook some of the oil fields.”  Brent crude fell by US92 cents or 1.6% to US$57.23 a barrel. US Nymex fell by US75 cents or 1.4% to US$51.29 a barrel.
  • Base metal prices fell by up to 1.8% on the London Metals Exchange on Thursday with lead down the most. But aluminium and nickel bucked the trend, up by 2.1% and 0.8% respectively. The gold futures price rose by US$7.00 or 0.5% to $1,290.00 an ounce.  The spot gold price was trading around US$1,286 an ounce in late US trade. Iron ore fell by US$2.10 or 3.4% to US$59.60 a tonne.

 

Ahead:

  • In Australia, the Commonwealth Bank Business Sales Index is released.
  • In the US, data on existing home sales is released.

 

Indicative Rates (Bank to Sell):

AUD / USD 0.7825 AUD / CAD 0.9693 USD / JPY 112.56
AUD / JPY 87.72 AUD / THB 25.18 GBP / USD 1.3158
AUD / EUR 0.6590 AUD / HKD 6.0451 NZD / USD 0.7032
AUD / GBP 0.5924 AUD / SGD 1.0607 NZD / EUR 0.5935
AUD / NZD 1.1116 AUD / FJD 1.6020 AUD / CNY 5.1761
AUD / CHF 0.7490 AUD / PGK 2.4819 All Ordinaries 5959.77
AUD / DKK 4.8947 EUR / USD 1.1698 Gold $US/oz 1290.18
AUD / SEK 6.3467 EUR / GBP 0.9004 Oil WTC $/b 51.24

 

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