News & Resources

Market Analysis

Latest Insights
Press Releases
Latest Insights

Global Market Update
The View from Australia

by Craig Killaby | November 17, 2021



> NZ Q3 PPI Input & Output : 1.6% & 1.8% v. 1.7% & 1.4% exp.  

> AU October MI Leading Index : 0.2% v. 0.0% prev.

> AU Q3 Wage Price Index : 0.6% v. 0.6% exp.

> UK October H/line CPI & Core CPI : 4.2% & 3.4% v. 3.9% & 3.1% exp.

> CA October CPI : 0.7% v. 0.7% exp.


Overnight Headlines (BBG)

> Inflation remains the key topic for markets, with UK consumer prices rising to a decade high of 4.2%, all but locking in a hike from the Bank of England next month

> WTI crude was choppy, as reports that Biden/Xi discussed China’s release of their crude stockpiles as a means of cooperation between the two nations

What you need to know

The pressure is mounting on the AUD, with the currency sliding as inflation angst took hold while local wage price increases failed to deliver despite returning to pre-pandemic levels. The AUDUSD looked heavy into yesterday’s open, holding around the 0.7300 handle before drifting lower throughout the session. AU Q3 WPI was the key data for the day, with inflation forecasts for the RBA hinging on rising wages, the data came in right on market estimates with wages rising 2.2% on the year. The number is well below the 3% level needing to be seen for the RBA to speed up their tightening path, with the slide in the AUDUSD seen in the aftermath all the way to a session low of 0.7263.


EURUSD saw a stop run in Asia, breaking through 1.1300 and touching 1.1264 before recovering into the European open. UST yields rose in Asia, as the Dollar looked to be breaking out, although on the open today it seems as though that breakout was short-lived with yields down across the UST curve. In the UK, a hot inflation print buoyed the Pound as market expectations for a rate hike from the Bank of England ramped up with the hottest consumer price print in ten years and seeing the GBPUSD recover as much as 0.75% from the session lows.


In the US, the volatility is starting to pick up into the end of the year with US equity markets seeing mixed results with the S&P500 down 0.3% while the NASDAQ gained. The dollar is down against the EUR, GBP and JPY although commodity currencies underperformed with the AUD, NZD and CAD seeing losses against the Buck. Risk appetite in commodity markets seems to be souring, with the price of WTI crude down 3.4% as traders worried about China releasing their reserves and flooding supply. While copper is down near 3%, Gold has been able to jump as the move lower in UST rates markets was supportive.


The Day Ahead




> US FOMC Members Evans and Bostic to speak

> NZ Q4 Inflation Expectations : 2.27% prev.

> AU RBA Ast. Gov. Ellis to speak

> US Weekly Unemployment Claims : 260K exp.

> US November Philly Fed Manufacturing Index : 24.2 exp.

> US FOMC Members Williams, Evans to speak


The data docket is light in Asia, so again we need to keep an eye on headlines from the US/China relations as the co-operation between the two superpowers becomes a fluid situation. Some Fedspeak on the calendar in Asia, with hawkish tones starting to get louder, next week may provide some heavy risk with the Fed chair decision upcoming.


US weekly labour market data will be watched, while expecting some positive data from the Philly Fed data. Tough to pick a direction for today, however the AUDUSD looks heavy yet again and I will need to stick to my recent call that 0.7200 may be on cards.


Range Today : 0.7240 – 0.7300


AUD/USD Technicals


Yesterday’s wage number in AU was pivotal, and likely caps the upside in the pair in the near-term as it becomes clear that easy RBA policy in the face of tightening overseas may limit appetite in the AUD. The 0.7290 level is my target on a break higher, while the pair may run into some support seen at 0.7240 on another dollar run. Will be an interesting weekly close with key dollar indexes on the verge of a breakout.

“Cambridge Global Payments” is a trade name, which in this document refers specifically to one or more of these legal entities: Cambridge Mercantile Corp., Cambridge Mercantile Corp. (U.S.A.), Cambridge Mercantile Corp. (Nevada), Cambridge Mercantile (Australia) Pty. Ltd.

Cambridge Global Payments (“Cambridge”) provides this document as general market information subject to: Cambridge’s copyright, and all contract terms in place, if any, between you and the Cambridge entity you have contracted with. This document is based on sources Cambridge considers reliable, but without independent verification. Cambridge makes no guarantee of its accuracy or completeness. Cambridge is not responsible for any errors in or related to the document, or for damages arising out of any person’s reliance upon this information. All charts or graphs are from publicly available sources or proprietary data. The information in this document is subject to sudden change without notice.

Cambridge may sell to you and/or buy from you foreign exchange instruments (including spot and/or derivative transactions; both kinds are here called “FXI”s) covered by Cambridge on a principal basis.

This document is NOT: 1) Advice of any kind, or 2) Approved or reviewed by any regulatory authority, or 3) An offer to sell or a solicitation of an offer to buy any FXIs, or to participate in any trading strategy.

Before acting on this document, you must consider the appropriateness of the information, based on your objectives, needs and finances. For advice, you must contact someone independent of Cambridge.

Certain FXIs mentioned in this document may be ineligible for sale in some locations, and/or unsuitable for you. Contact your Cambridge representative for further information regarding product availability/suitability before you enter into any FXI contract.

FXIs are volatile and may cause losses. Past performance of a FXI product cannot be relied on to determine future performance.

This document is intended only for persons in Canada, the US, and Australia. This document is not intended for persons in the UK or elsewhere in the EEA. In Australia, this publication has been distributed by Cambridge Mercantile (Australia) Pty. Ltd. (ABN 85 126 642 448, AFSL 351278); for the general information of its customers (as defined in the Corporations Act 2001). This entity makes no representations that the products or services mentioned in this document are available to persons in Australia or are necessarily suitable for any particular person or appropriate in accordance with local law.

Fees may be earned by Cambridge (and its agents) in respect of any business transacted with Cambridge.

The document is intended to be distributed in its entirety. Unless governing law permits otherwise, you must contact the applicable Cambridge if you wish to use Cambridge services to enter a transaction involving any instrument mentioned in this document.

© Copyright 2018, Cambridge Mercantile Corp., ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of Cambridge Mercantile Corp. See for contact details.