RBA Speculation Limits Gains, Focus Turns To Aussie & Chinese Data

AUD/USD climbed yesterday as a positive showing from U.S. equity markets dented the greenback, with focus on M&A activity and positive mood music surrounding coronavirus vaccine research. Further gains may have been capped by an AFR piece (summarised in an earlier bullet) doing the rounds in Asia-Pac hours, which noted that "the RBA is considering a more direct form of loosening monetary policy" - purchasing bonds further along the yield curve and trimming the cash rate from the current 0.25% level.

• Australian Agriculture Min Littleproud admitted that the Chinese customs office has instructed its officers to increase inspections of Australian wheat and barley imports, but sought to downplay the move as he claimed that "it is not uncommon for China to issue these types of notice".
• PM Morrison will unveil his government's latest measures to support domestic gas industry, building on his pledge to initiate a "gas-fired" economic recovery.
• The pair sits at $0.7284, a touch below neutral levels. A break under Sep 9 low of $0.7192 would open up the 50-EMA at $0.7157. On the flip side, a jump above Sep 10 high of $0.7325 would draw attention to Sep 3 high of $0.7340.
• Minutes from the RBA's most recent MonPol meeting and domestic house price index are due today, with Chinese economic activity data also providing interest. On Thursday, Australia will release its labour market report.