Bell FX Currency Outlook: The Australian Dollar has edged slightly higher despite a second consecutive poor night on global stock markets.
RBA keeps cash rate at 3 percent
Australia: Markets started the overnight session with equities and core bond yields generally lower. The release of the Fed's beige book later in the session did little to change market sentiment.
London's FTSE 100 dropped 0.58% while Frankfurt's DAX 30 finished 0.41% lower and New York's Dow Jones closed 0.95% lower. The AUD was ahead on the day, though on reports that activity surged at a number of Chinese ports in September and with the success of yesterday's ACGB Apr-2029 bond issue.
The Fed Beige Book stuck to the script, saying activity was expanding modestly and little change in prices (all clear for QE3).
In the domestic front, Westpac Consumer Confidence for October rose by 1.00%. The AUD has formed a short-term base around the USD 1.0200 level having traded below there in recent days in relatively shallow dips.
The market will be closely watching the release of Australian Labor Force results at 11.30am AEST today and the figures are expected to show some further a weakening in the labor market in September.
A survey of 17 economists revealed median forecast for unemployment to rise to 5.2% from 5.1% in August. If the data is weaker than expected, the AUD will feel more downside pressure.
In Australia today, the Labour Force Report is due and the market is looking for a jobs bounce of 20K after a few months of subpar readings. We still feel the AUD will head lower, but conflicting forces around current levels suggests could see 1.0500 before a sustained selloff.
Majors: The US Dollar was slightly weaker despite a somewhat sluggish tone to risk sentiment and US equity markets. Disappointment from Alcoa's earnings, where it cut its demand forecast for aluminium, was joined by news that Chinese officials had cancelled engagements at the IMF and World Bank meetings in Japan.
Oil prices were mixed overnight in choppy trade as ongoing concerns over the global economy weighed on prices, while Middle East tensions provided some support.
Spot gold prices fell moderately overnight on continuing euro zone and global growth concerns. Base metals prices were generally weaker overnight and yet again agricultural commodities prices were mixed.
11 OCT AU Consumer Inflation
AU Employment Data
US Trade Balance
US Initial Jobless Claims
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