Australia

The prospect of another rate hike from the Reserve Bank of Australia (RBA), a crackdown of speculative forces in iron ore futures markets and failure to clear a stubborn resistance level has Australia’s ASX 200 facing the prospect of renewed downside.

Australia’s September jobs report is arguably the most important G10 FX data release in the world on Thursday, ensuring there’ll be significant interest among AUD/USD and ASX 200 traders.

The combination of a deteriorating macroeconomic backdrop, the first monetary policy decision from a new RBA governor and threat of market intervention from the Bank of Japan has created an interesting mix for the AUD/JPY.

The ASX 200 has continued to show resilience around the key 7,000 support level, despite the surge on bond yields, negative sentiment and rising inflation. What if sentiment improves?

In an environment of heightened risk aversion, sluggish global economic growth and continued grind higher in rates, a volatile monthly inflation indicator from Australia doesn’t scream as overly important.

An uneventful year for the ASX 200 could be about to get a lot more exciting with the index perilously close to breaking long-run uptrend support dating back to the start of the coronavirus pandemic.

Australia’s August labour force survey had something for both AUD/USD bulls and bears, but in the end the detail does not meaningfully change the outlook for interest rates.

AUD/USD downside has slowed despite a lot of negativity, bolstering the case for a near-term bounce ahead of key risk events later this week.

Hong Kong’s Hang Seng is arguably the ugliest index chart in the world right now, for good reason.

Australian stocks don't look particularly cheap, adding to downside risks from earnings disappointments.

Unemployment jumps unexpectedly diminishing the risk of a wage price spiral forming.

No matter how you slice or dice it, negatives for the AUD/USD continue to pile up.

USD/JPY is back to levels where the BOJ intervened last year but that doesn't mean it will do so again.

USD/JPY formed a bearish engulfing candle yesterday to suggest all is not well around the cycle highs. Beyond that, it is likely down to NFP as to where USD/JPY finishes the week. We also look at a potential bullish setup on the China A50 which is 'turned the bearish ship around' since we noted its failure to break beneath 12,400 (despite negative sentiment).

AUD/USD fell to an 8-week low, US indices are on track for bearish engulfing weeks and even gold closed the day lower during a risk-off session. The question in my mind as we approach the weekend is whether we’re witnessing a knee-jerk reaction to the US credit-trading downgrade and are at risk of prior trends returning, or whether it is the beginning of something more sinister.

The RBA held their interest rate at 4.1% for a second consecutive month. And the fact AUD fell over -0.6% and the ASX touched a high of the week shows that not everyone was positioned for the outcome.

Whilst Aussie employment data raised expectations of another RBA hike, today’s soft CPI figures may get the RBA off the hook from those opposing higher rates. AUD/USD fell accordingly.