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A$ Rebounds As Yields Surge Post Jobs Beat

FOREX
MarketsStoryForeign Exchange BulletsFixed Income Bullets

The USD BBDXY index sits lower, last near 1283, off nearly 0.15% in Thursday trade so far. We remain comfortably within recent ranges for the index though. The biggest outperformer has been the A$, up over 0.70%, to be tracking in the 0.6415/20 region. 

  • The A$ surged following the better than expected jobs data for Nov. The headline was better than forecast and was all driven by the full time component. The unemployment rate ticked down as well to 3.9%, against a 4.2% forecast.
  • Local Australian government bond yields have surged across the curve, up around 10bps. RBA easing expectations have been trimmed for Feb next year, now back to 50/50 (per OIS off WIRP on BBG). Tues/Wed we were pricing in a 66% chance of a cut.
  • For AUD/USD we are still some distance from the 20-day EMA, which is back around 0.6480/85.
  • The other positive for the AUD has been higher China/HK equities, as the economic work conference in China wraps up. The market will be looking for any stimulus clues for before year end and into 2025.
  • NZD/USD is up 0.40%, last near 0.5805/10. It has been dragged higher with AUD, although the AUD/NZD cross is still up to 1.1050 (lows at the start of the week were 1.0933).
  • USD/JPY got to lows of 151.96, but sits back at 152.29 in latest dealing, still modestly stronger in yen terms for the session. AUD/JPY is back to 97.70/75, up 0.60% for the session. The better equity backdrop in the region is likely helping the cross.
  • Looking ahead, the main focus will be on the ECB decision. A 25bps cut is expected. Before that we have the SNB outcome. In the US, we have the PPI and initial jobless claims.  
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The USD BBDXY index sits lower, last near 1283, off nearly 0.15% in Thursday trade so far. We remain comfortably within recent ranges for the index though. The biggest outperformer has been the A$, up over 0.70%, to be tracking in the 0.6415/20 region. 

  • The A$ surged following the better than expected jobs data for Nov. The headline was better than forecast and was all driven by the full time component. The unemployment rate ticked down as well to 3.9%, against a 4.2% forecast.
  • Local Australian government bond yields have surged across the curve, up around 10bps. RBA easing expectations have been trimmed for Feb next year, now back to 50/50 (per OIS off WIRP on BBG). Tues/Wed we were pricing in a 66% chance of a cut.
  • For AUD/USD we are still some distance from the 20-day EMA, which is back around 0.6480/85.
  • The other positive for the AUD has been higher China/HK equities, as the economic work conference in China wraps up. The market will be looking for any stimulus clues for before year end and into 2025.
  • NZD/USD is up 0.40%, last near 0.5805/10. It has been dragged higher with AUD, although the AUD/NZD cross is still up to 1.1050 (lows at the start of the week were 1.0933).
  • USD/JPY got to lows of 151.96, but sits back at 152.29 in latest dealing, still modestly stronger in yen terms for the session. AUD/JPY is back to 97.70/75, up 0.60% for the session. The better equity backdrop in the region is likely helping the cross.
  • Looking ahead, the main focus will be on the ECB decision. A 25bps cut is expected. Before that we have the SNB outcome. In the US, we have the PPI and initial jobless claims.