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Global Market Update
The View from Australia

by Craig Killaby | October 11, 2021



> US Bank Holiday – Columbus Day

> CA Bank Holiday – Thanksgiving


Overnight Headlines (BBG)

> China’s crackdown on a number of industries continues, with the next focus seeming to be on the banking sector as the government tightens their grip on the sector

What you need to know

In what was a very quiet session in terms of data and headlines, the focus was on commodity markets as the strong inflation narrative continues to be bolstered as we continue into Q4. The AUDUSD looked steady into the open, which was a choppy holiday trading session as both Canada and the US were closed for their respective holidays. Commodity prices are elevated, as supply chain bottlenecks cause shortages across the economy and drive prices higher. In light of those moves, commodity backed pairs were the strongest performers with he AUDUSD pushing higher and set a fresh high of 0.7373 in the process. Bond markets were closed in the US for Columbus day, with UST yields in focus as inflation expectations start to ramp up quickly.


The Dollar was able to push higher, with the DXY up 0.3% and looking poised to break through key resistance despite the commodity rebound. US equities off slightly, with the S&P500 down 0.4% at the time of writing. GBPUSD had a wide range for the session, looking poised to break through to 1.3700 before dropping down to 1.3600, where it opens up this morning. WTI crude has been a major story of late, without OPEC changing their production curbs the price broke the US$80/barrel level and is ringing some alarm bells for markets. Iron ore has also rebounded after its brief September selloff, up over 3% while Copper is folling suit gaining near 2% to kick off the week.


The Day Ahead




> US FOMC Member Evans to speak

> AU September NAB Business Confidence : -5 prev.

> US August JOLTS Job Openings : 10.95Mio exp.

> US FOMC Members Clarida and Bostic to speak


With AU sentiment likely to rebound sharply as the economy reopens, expecting today’s NAB business confidence figures to wash over markets although a better than expected read may see a rally as it sets the floor for the upcoming prints. Apart from those tier two numbers, Fedspeak from key members will be watched closely in the aftermath of the US employment report as the Fed’s tightening path a major driver for all markets. Expecting a drift back towards the 0.7300 handle today after what was an interesting session for the AUDUSD.


Range Today : 0.7290 – 0.7365


AUD/USD Technicals


After touching the highest level in three weeks, the 0.7373 high is proving to be strong resistance in the near term. A break higher will target 0.7427 (100DMA), while 0.7226 is the support on a quick reversal. With the data really starting to ramp up in the coming days, the higher AUDUSD could be an opportunity ahead of the US inflation print.

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