Australian dollar flies as market sniffs a delaying Fed
David Llewellyn-Smith | Dec 09, 2021 09:11
DXY was down and EUR up overnight:
To infinity and beyond!
Everything anti-DXY up:
Except EM junk:
Treasury curve steepened:
Get The App
Stocks led by GAMMA:
Westpac:
Event Wrap
Bank of Canada kept its policy rate at 0.25%, matching widespread expectations. Officials reiterated that the “economy continues to require considerable monetary policy support.” As such, they remain committed to keeping the policy setting steady until “economic slack is absorbed so that the 2 percent inflation target is sustainably achieved…this happens in the middle quarters of 2022.” The current spike in inflation is viewed as temporary, although it is “closely watching inflation expectations and labour costs to ensure that the forces pushing up prices do not become embedded in ongoing inflation.”
US JOLTS job openings in October of 11.033m beat consensus of 10.469m, with September revised to 10.602m from prior 10.438m.
Event Outlook
Aust: RBA Governor Lowe will speak at the Payments Summit 2021, 9am, online.
NZ: Manufacturing activity in Q3 is expected to have fallen by 4.2% q/q due to the lockdowns.
China: Consumer inflation is expected to remain modest in November (market f/c: 2.5%yr) despite intense supply-side pressures as evinced by producer prices (market f/c: 12.1%yr). M2 money supply growth should remain steady in November and is ample for robust activity growth (market f/c: 8.7%). Meanwhile, new loans for November should point towards healthy growth in credit into year end, setting the scene for an acceleration in investment in 2022 (market f/c: CNY1572.5bn). Note, the M2 and loan data is due 9-15 December.
Ger: Germany’s trade surplus is expected to moderate slightly in October, but should remain wide in 2022 as exports benefit from the global recovery (market f/c: €14.3bn).
US: Initial jobless claims are expected to stabilise near historic lows (market f/c: 220k). The final release for October’s record high wholesale inventories will confirm businesses’ desire to rebuild stock as supply chain constraints are worked through (market f/c: 2.2%).
An evening of classic reflation dynamics which makes absolutely no sense as OMICRON deteriorates except if you extrapolate it to the US where vaccine rates are low and falling and the market is now sniffing out delayed Fed tightening.
This is the definition of febrile. If OMI is manageable it will reverse in short order. If not, it will keep going.
Not much else that I can add.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.