Rallying Still As Americans Go To Polls

Although the RBA decision applied some pressure to AUD/USD, the rate bounced and surged later in the day owing to a mix of supportive factors. Oil prices firmed up amid signals that OPEC+ has moved closer to delaying its Jan output hike, while the latest API report suggested that U.S. crude stockpiles shrank by ~8.0mn barrels. The DXY retreated ahead of the U.S. election, as polling continued to put Biden in pole position. AUD/USD added more than 100 pips, rallying to its best levels since Oct 14.

• Reporting on Sino-Australian trade tensions have gained some more traction. BBG sources suggested that China "won't allow imports of a swathe of Australian of commodities and foodstuffs from as early as this week. (...) China's blacklist (...) includes coal, barley, copper, sugar, timber, wine and lobster". Separately, the SCMP reported that China is expected to ban A$560mn worth of imports of Australian wheat.
• In a separate report, the SCMP noted that Australia will join the Malabar naval exercise after a 13-year hiatus, drawing China's ire.
• The rate has extended gains and last trades +27 pips at $0.7191, through Tuesday's highs & the 50-DMA ($0.7183). Bulls look for a rally above Oct 13 high of $0.7218, which would open up Oct 10 high of $0.7243. Conversely, a retreat under Nov 3 low of $0.7028 would prompt bears to target Nov 2 low of $0.6991.
• While the U.S. election remains an obvious thing to watch, the local docket features retail sales & weekly payroll data. Later in the week, focus turns to Australian trade balance (Thursday) & the RBA's SoMP (Friday).