AUD/USD Testing 0.65 As Data from China and Australia Show Improvement
Yesterday during the US session AUD/USD made a significant turnaround upward as risk sentiment improved massively in financial markets and US bond rates lost more than 20 bps, following the soft US CPI inflation numbers for October. The US dollar tumbled nearly 200 pips lower across the board which sent this pair above 0.65 and above the 100 daily SMA, indicating that buyers are in charge and we might see a trend reversal if today’s retail sales from the US are soft too.
The US 10-year Treasury rates reached 4.70% on Monday, bolstering the USD, but then reversed course, giving back all of the gains earned in the previous three days and sliding below 4.50%. Today we had the price index for Q3 from Australia and the industrial production figures from China.
Australian Q3 Wage Price Index
- Wage Price Index Q3 +1.3% vs. +1.3% expected
- Private sector wages QoQ +1.4%
- Public sector +0.9%
The Reserve Bank of Australia (RBA) anticipated that aggregate wage growth would continue to pick up over the course of 2023. The growth in the WPI was forecasted to peak at around 4.25% towards the end of this year. Further ahead the Bank expects that as economic growth slows, labour market conditions are expected to ease slightly, potentially leading to a modest slowdown in wage growth
Chinese October Industrial Production and Retail Sales
- Industrial Production YoY +4.6% 4.4% expected
- Retail sales YoY +7.6% vs 7.0% expected
National Bureau of Statistics (NBS) comments:
- foundation of economic recovery is yet to be consolidated
- expects China’s price situation to improve, no deflation
- will be twists and turns in the economic recovery
- employment situation is generally stable
- property market is still in adjustment, transformation
AUD/USD Live Chart
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