The Reserve Bank of Australia decided to leave its Cash Rate at a record-low 2.50 percent for the 15th consecutive month to counterbalance the strength of the Australian dollar and spur jobs.
The European Central Bank and Bank of England also kept their respective rates steady (0.05 percent and 0.50 percent). ECB’s Draghi made clear the central bank’s intention to bring back ECB’s balance sheet to its March 2012 levels and projected unanimity within its governing council.
On the employment front, New Zealand’s Unemployment Rate eased to 5.4 percent in the September quarter, its 5.5-year low, as more migrants get jobs and Canterbury rebuilding continues. On the other hand, Australia’s Unemployment Rate remained steady at 6.2 percent for the second month, while Employment Change gathered 24,100 more jobs in October.
In North America, Canada gained jobs for the third time in four months in October, adding 43,100 jobs after September’s 74,100 gain. Statistics Canada reported Unemployment Rate eased to pre-2009/early-2009 levels to 6.5 percent in October. In Contrast, US Non-Farm Employment Change saw a gain of 214,000 compared to a median estimate of 235,000, while Unemployment Rate edged slightly lower to 5.8 percent.
In other news, Australia’s Bldg Approvals sags 11 percent in September, much weaker than the -0.9 percent forecast and a huge turnaround from August‘s 3.4 percent gain. The September decline was the weakest reading since July 2012. Trade deficit increased to –AUD2.26 billion in September, while Retail Sales edged 1.2 percent higher.
Italy’s Manufacturing PMI was the lone decliner among the countries who published Manufacturing PMI on Tuesday. Data showed it fell to 49.0 on October, below the 50 level for the second time in three months. Top Manufacturing PMI came from Switzerland (SVME PMI) and UK, while US ISM Manufacturing PMI came in at 59.0.
Gold bears rejoiced as they were able to push Gold to a new 4-year low this week. However, profit takers may have pushed price to complete a considerable reversal candle. We’ll find out this week if we will see stops squeezed higher through the $1,200 level, or bearish momentum would reign further this November.
Oil posted another considerable weekly decline and this time it hit a new near-3 year low just below $76. The weekly price action is much weaker compared to that of Gold but Oil posted four consecutive higher lows which could indicate a short-term attempt through the $80 mark.
EURUSD posted another multi-year low for the second week as Dollar’s bullish momentum continues to chug along nicely. The pair hit a 1.2356 low on Friday before it closed the week at 1.2454. Bulls could encounter sellers between 1.2500 and 1.2700.
GBPUSD hit a new 1-year low as buyers have a difficult time keeping a firm footing in the 1.6000 level. The next few bullish attempts should bear better results; else, we could see prolonged bearishness in this pair.
USDJPY has set another multi-year high for the third straight month this week as JPY bears unlock their inhibitions. The pair made a bullish close for the third straight week, and came close to the 116 level in the process. Any dips are expected to be shallow, so opportunities will likely be available in the coming days.
The Week Ahead
This Monday, Australia will start the ball rolling with their issuance of Home Loans data. This will be followed shortly by China’s CPI and PPI; Canada’s Housing Starts.
Tuesday will start quite early with Japan’s Current Account and Bank Lending; Australia’s NAB Business Confidence and HPI; and China’s New Loans. The day won’t be too busy thanks to the observance of a few holidays around the world (Armistice Day for France, Remembrance Day for Canada, and Veterans Day for the United States).
Wednesday will start off very early with New Zealand’s RBNZ Financial Stability Report and RBNZ Governor Wheeler’s speech. A few hours later, we will hear about Tertiary Industry Activity and M2 Money Supply; Australia’s Westpac Consumer Sentiment and Wage Price index; UK jobs data (Jobless Rate, Claimant Count Change, and Average Earnings Index), BOE Inflation Report, and BOE Carney’s speech.
Thursday will be mildly busy with New Zealand’s Business NZ Manufacturing Index and FPI; Australia’s MI Inflation Expectations; Japan’s Core Machinery Orders; China’s Retail Sales, Fixed Asset Investment, and Industrial Production; Switzerland’s PPI; Canada’s NHPI;; US Jobless Claims and JOLTS Job Openings.
Finally, Friday will cap the week with the announcement of French, Italian, and German Prelim GDP; Eurozone Final CPI and Flash GDP; Canada’s Manufacturing Sales; US Import Prices, Retail Sales, Business Inventories, and Prelim UoM Consumer Sentiment.