AUD: Asia-Pac: AUD/USD Drifts Lower With Risk
The AUD/USD has had a range today of 0.6468 - 0.6487 in the Asia- Pac session, it is currently trading around 0.6470, -0.20%. Looks like there could be more to this pullback in risk and the AUD is normally everyone's favourite proxy to use, should this correction in risk build the recent outperformance of the AUD especially in the crosses would be most at risk. The AUD/USD has moved back toward the 0.6450 area where it found good support earlier in the week. A lot rides on how risk trades from here, a break of the 0.6450 area would then target the more important 0.6350 area. Rallies above 0.6500 should find sellers on the day while risk trades poorly.
- "CHINA, AUSTRALIA OFFICIAL DISCUSS MULTILATERAL TRADING SYSTEM" - BBG
- MNI AU - Weaker Headline Export & Import Growth, But Caveats Apply : China's headline Oct trade figures were weaker than forecasts, with export growth falling to -1.1%y/y, the weakest result since Feb this year (the market forecast a drop from 8.3% to 2.9%). Imports also moderated to 1.0%y/y from 7.4% in Sep (2.7% was the forecast). The important caveat is that we had the National Day holiday period in the first part of Oct (1st to the 8th), which could have impacted, while we were also coming off a high base of export growth from last year (+12.6%y/y for Oct 2024).
- Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD1.22b), 0.6550(AUD 415m), 0.6600(AUD682m). Upcoming Close Strikes : 0.6500(AUD1.19b Nov 12), 0.6530(AUD882m Nov 12)- BBG
Fig 1: AUD/USD spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
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OIL: Crude Continues Trending Higher Ahead Of EIA Data & Fedspeak
Oil prices continued trending higher during today’s APAC session with little news to give them direction. US industry-based data showed product drawdowns and the market continues to monitor strikes on Russian energy infrastructure which are impacting refining rates. For now the US EIA’s forecast of higher non-OPEC output and lower prices has been looked through but the IEA’s report is not until 14 October.
- WTI is up 0.9% to $62.28/bbl after rising to $62.36 and Brent is 0.8% higher at $65.95/bbl following a peak of $66.04. Both benchmarks are up around 2.2% since the weekend’s cautious OPEC decision.
- Official EIA oil data will still be released Wednesday as the agency is continuing to publish for now despite the US government shutdown. Bloomberg reported mixed industry-based data with oil inventories building but falling at key hub Cushing last week, according to people familiar with the API data. The reported product drawdown has likely provided support to prices today ahead of the EIA data.
- A soft outlook was reflected in the EIA’s October report as it is forecasting global oil inventories to build through next year pushing Brent down to $52/bbl from $62 in Q4 2025. Global output rises across its forecast horizon driven by non-OPEC. It doesn’t believe OPEC will be able to achieve its higher production targets helping to support prices.
- Later the Fed’s Musalem, Barr, Goolsbee, Kashkari and the ECB’s Lagarde, Elderson, Buch, Tuominen and BoE’s Pill speak. The September FOMC meeting minutes will also be published.
MNI EXCLUSIVE: Former BoJ Chief Economist On The Policy Rate Outlook
INDONESIA: Confidence Signals Slower Q3 Consumption Growth & More Easing
Indonesian consumer confidence fell for a second straight month to 115.0 in September from 117.2, the lowest since April 2022. There were major protests at the end of August regarding economic pressures and generous housing subsidies for politicians, which were overturned. The respected finance minister Indrawati was also replaced and dissent restricted. The issues appear to be still weighing on sentiment.
- Private consumption growth been steady around 5% for around two years but the 1.8% q/q drop in Q3 average consumer confidence is signalling that it slowed last quarter.
Indonesia private consumption
Source: MNI - Market News/LSEG
- Bank Indonesia surprisingly cut rates for the third consecutive month in September signalling that it has become more focussed on growth rather than the currency and so further easing on 22 October is possible given the softer consumption picture.
- BI's September statement added the phrase "joint efforts to stimulate economic growth", suggesting that it may be supporting government policy. It expects H2 2025 to improve due to the "strengthening policy synergy between Bank Indonesia and the Government".
- September consumer confidence was pressured by a 4 point drop in current incomes to 112.9 and 1 point in employment to 92.0. Thus it is unsurprising that durables purchases fell almost 2 points to 103.2. Expectations were 2 points lower to 127.2 driven by incomes and business but employment was slightly higher.
