AUD/USD: Above 2-DMA, awaiting key data this week, commencing today

• AUD/USD in focus this week, with trade war noise and data on the cards.
• AUD/USD trades at 0.6776, flat on the day so far within a tight range just above  20  DMA.

AUD/USD is steady in early Asia following thin trade overnight with it being  Columbus day.  There was quite a lot for markets to digest overnight but no real game-changers.  However, the  news that China needed more time to agree details of ‘phase one’ agreement hit sentiment and is a developing theme for the commodity complex to pay close attention to.  

Stock markets were weaker in Europe and touch lower in the US as well.  US treasury futures traded, implying a fall in the 10-year yield from 1.72% to 1.67%. With a focus on the Reserve Bank of Australia, the Australian 3-year government bond yields roundtripped from 0.68% to 0.66% and back again, the 10-year yield eking 1.04% to 1.01% to 1.03%. “Markets are pricing 11bp of easing at the 5 Nov RBA meeting, and a terminal rate of 0.42% (RBA cash rate currently at 0.75%),” analysts at Westpac explained.  

RBA minutes coming up

For the day ahead,  we have Australian weekly consumer confidence, RBA minutes, and China’s Consumer Price Index and Producer Price Index data. Analysts at Westpac explained that the minutes from the RBA Board’s 1 October meeting main focus should be on “explaining the cash rate cut to 0.75% but there might also be some forward-looking commentary of interest.” Looking ahead, the Aussie employment data will be a major event – “Our forecast is roughly in line with the market, consistent with slowing employment growth. A number close to the market, however, is unlikely to provide the smoking gun for a Nov cut. Raw historical data for Sep is firmly positive and as such a sharp drop in the headline jobs print is less likely,” analysts at TD Securities explained.  

AUD/USD levels