See the latest Australian dollar analysis here:
DXY fell last night as EUR lifted and CNY swooned:
The Australian dollar was hit against DMs:
EMs were even weaker:
Gold held on:
Metals are telling a very different story to stovcks about the global economy:
Em stocks were stable:
Bonds were mostly bid:
And stocks are now going up becasue they are going up:
Westpac has the wrap:
CNBC reported that there was growing pessimism in Beijing over potential for a trade deal with US due to US reluctance to roll back tariffs, citing un-named “sources”. Separately, newswires stated that US will extend exemptions on dealing with Huawei until 16 February 2020, substantially longer than market concerns that it might have been limited to just weeks.
Pres. Trump tweeted his willingness to testify in impeachment investigations. He also tweeted that he’d had “cordial”discussions with Fed Chair Powell.
NAHB homebuilder confidence index at 70 held just below last month’s recent high of 71 (vs est. 71). Six-month ahead expectations rose to an 18-month high (77, prior 76), the report citing shortages of housing lots but also affordability headwinds and labour shortages.
Germany continued to push back on potential for fiscal stimulus stating that there was scope to generate growth through appropriate investment without impacting budgets.
NZ: Q3 PPI is released but often overlooked given Q3 CPI has already been reported.
Australia: the RBA minutes are released. While forecasts were left relatively unchanged in the Nov Statement on Monetary Policy, the Overview noted “the Board was mindful that rates were already very low and that each further cut brings closer the point at which other policy options come into play”. RBA Assistant Governor (Financial Markets) Kent speaks at the Australian Securitisation Forum, 9:05 am. Treasurer Frydenberg gives the CEDA annual dinner address.
US: Oct housing starts and building permits are released. Fedspeak involves Williams at the SIFMA conference.
Not much new, to be honest. There’s no evidence for the rebound in global growth that stocks are so busy pricing. It is only the capital gains themselves that offer any hope of such. If stocks can hold then there’ll be some marginal wealth effect for US consumers.
But it is all very shaky. Without tarrif cuts there’ll be no multipliers into Chinese and European growth. Meanwhile, Brexit looms, Hong Kong is imploding and oil remains in a glut.
It remains an environment of elevated reward and risk with the Australian dollar paralysed by the tension.