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Global Market Update
The View from Australia

by Craig Killaby | November 25, 2021

Data/Speakers

 

> NZ October Trade Balance : -1.286bio v. -1.575bio exp.

> AU Q3 Private Capex : -2.2% v. -1.9% exp.

> EU November German GFK Consumer Climate : -1.6 v. -1.0 exp.

> US Bank Holiday – Thanksgiving

What you need to know

A very quiet session across markets, as one would expect with US Thanksgiving seeing US bond markets closed and thin trading conditions. During Asia, as investors looked to tie things up before the holiday it was a positive outlook for business investment in the aftermath of the COVID lockdowns here in AU, which boosted sentiment and dragged the AUDUSD higher. The pair was able to break the 0.7200 handle very briefly, before drifting lower throughout Europe.

 

Nothing to report in the US session, with the Dollar having a lacklustre day and down 0.15% in DXY dollar index terms. UST markets closed, while US futures edged up slightly. Commodity market moves muted outside of the base metals, with iron ore dropping over 7% as volatility continues to be a theme while copper also fell down 0.6%. WTI crude posted 0.4% losses, while gold is up a touch, 0.3% higher on the day.

 

The Day Ahead

 

Data

 

> AU October Prelim Retail Sales : 2.2% exp.

> EU ECB President Lagarde to speak

 

Local retail sales figures will be the only data of note in Asia, and with the US on holidays, there is still no USD delivery until late in the session making for a quiet end to the trading week. ECB President Lagarde is due to speak this evening, with the only risk being a hawkish tone as central banks in most major markets embark on their path to normalization. Not expecting a major break today, with a tight range to be expected in thin conditions.

 

Range Today : 0.7180 – 0.7220

 

AUD/USD Technicals

 

The 0.7180 level seems to be holding up the AUDUSD after the strong selloff seen in November. Need to see a break toward support at 0.7170 to bring 0.7100 and the YTD low of 0.7106  into the picture, which seems possible. The EOM flows will be important as we open up next week post-holiday, however upside seems capped around the 0.7200-middle for the time being.

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