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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
AUD
AUD/USD has meandered in early Sydney trade with participants in the waiting mode ahead of the imminent RBA meeting. China's softer than expected official PMI data published left the AUD unfazed, as did local releases, but AUD/USD has edged lower over the last half an hour or so.
- The RBA will deliver their monetary policy decision on Tuesday. Reminder that consensus now looks for the Bank to drop its YCT mechanism at tomorrow's decision, after they have consistently refrained from defending their yield target via ACGB Apr '24 purchases in recent days.
- Worth taking a look at the options space, as AUD/USD implied volatilities keep rising across the curve. The overnight tenor has surged to 15.43% this morning, its highest point since Sep 22, as participants await the RBA's decision. Implied 1-week vol has extended gains to 10.99%, its best level since Mar 26.
- On the data front, ANZ job ads grew 6.2% M/M last month after a 2.8% decline in Sep, as Sydney, Melbourne and Canberra emerged from their respective lockdowns. The final reading of Markit M'fing PMI was revised higher to 58.2 from 57.3.
- Notable local releases due later this week include building permits (Wednesday), trade balance (Thursday) and RBA SoMP (Friday). The Reserve Bank's Dep Gov Debelle will participate in a panel discussion tomorrow.
- Spot AUD/USD last trades -10 pips at $0.7508 and bears would be pleased by a continued sell-off past Oct 22 low of $0.7454 towards Oct 8 low of $0.7288. Bulls need a breach of the 50% retracement of the Feb-Aug slide, which coincides with the 200-DMA at $0.7557. Above there opens Jul 6 high of $0.7599.
Fig. 1: AUD/USD 1-Week ATM Implied Volatility (%)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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