 Australian Dollar's misery continues today, firstly pressured by Q3 inflation data that showed encouraging progress on disinflation. This development has strengthened the case for RBA to keep interest rates unchanged at 4.35% in its upcoming meeting next week. More importantly, a rate cut in February now appears more probable than ever. While there are some speculations about a possible cut as early as December, persistent inflation in the services sector suggests that RBA would prefer to wait for additional data before easing monetary policy. The Commonwealth Bank, previously the only one among Australia's big four banks forecasting a December rate cut, has today adjusted its expectation to February, aligning with Westpac, NAB, and ANZ. Further weighing on the Aussie is ongoing weakness in Chinese and Hong Kong stock markets. Reports from Reuters yesterday indicate that China’s top legislative body may unveil a substantial CNY 10T (USD 1.4T) stimulus package next week. This announcement, timed around the US presidential election on November 5, could allow for strategic adjustments to the stimulus plan based on the election’s outcome. However, market enthusiasm has remained muted, without doubt on the details and effectiveness of the new fiscal measures.... |
