GOLD: Gold Fails to Break 20-day EMA, Moves Lower
Oct-31 02:58
- After four days of strong losses, gold rebounded overnight to finish higher in the US trading session by +2.40%. Starting the Asia trading day near to the 20-day EMA of US$4,025.33, gold opened strongly from $4,024. However it was unable to break above the 20-day EMA, giving back early gains to lower at $4,014.78.
- For the week, gold remains lower by -2.3%, with successive weeks of losses to finish October.
- Overnight a report from the World Gold Council showed that Central Bank buying continues to underpin gold's rally with the July to September period seeing 220 tons of gold purchased by them, an increase of 28%.
- In China commercial bank's have been forced to raise their minimum purchase amount of gold from CNY900 to CNY1,100 as accumulation plans by investors are up 20% according to Ping An (source BBG).
- Moves in gold in the coming weeks will be watched eagerly, assuming trade tensions ease. Investors will watch closely to assess whether the more than 50% rise in gold was due to the 'safe haven bid' or the material change in markets, driven by Central Bank investment behaivour.
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AUSSIE BONDS: Holding Cheaper, Market Continues To Price Out RBA Cut
Oct-01 01:48
ACGBs (YM -4.0 & XM -5.5) remain weaker.
- S&P Global PMI Manufacturing Index falls to 51.4 from 53 in Aug.
- Cash US tsys are slightly cheaper in today's Asia-Pac session after yesterday's modest twist-steepener.
- Cash ACGBs are 4-7bps cheaper with the AU-US 10-year yield differential at +22bps.
- The latest ACGB Dec-34 supply achieved a weighted average yield that printed 0.40bp through prevailing mids (per Yieldbroker). However, the cover ratio decreased to 2.1033x, thelowest since its debut in 2023, from 3.1708x.
- The bills strip is -4 to -6 beyond the first contract.
- RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision. Pricing across meetings is 1-4bps firmer than yesterday’s pre-RBA levels. Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
STIR: RBA Dated OIS’ Firming Since August CPI Extends After RBA Decision
Oct-01 01:34
RBA-dated OIS pricing has firmed modestly across meetings following yesterday’s RBA Policy Decision.
- At the time of writing, pricing across meetings was 1-4bps firmer than yesterday’s pre-RBA levels.
- Notably, this post-RBA move leaves pricing some 10-19bps firmer than last Wednesday’s pre-CPI levels.
- A 25bp rate cut in October is given a 35% probability, with a cumulative 11bps of easing priced by year-end.
Figure 1: RBA-Dated OIS – Current Vs. Pre-CPI
Source: Bloomberg Finance LP / MNI
CRYPTO: Ethereum - Bounces, Technically $4300-$4500 To Be Faded First Up
Oct-01 01:24
Ethereum had a range overnight of $4093.19 - $4208.98, Asia is trading around $4152, -1.05%. Ethereum had a decent bounce after triggering stop losses sub $4000 last week. Having broken big support around $4100, technically rallies should now be faded initially. The first sell zone is now back towards the $4300/$4500 area.
- Menthor Q on X: "Crypto asset flows. "Digital asset investment products saw US$812m in outflows last week, though YTD inflows remain robust at US$39.6bn, close to last year’s record ... Bitcoin (-US$719m) and Ethereum (-US$409m) faced pressure, while Solana (+US$291m) attracted strong inflows.”
- Milk Road on X: “For a decade, crypto has moved in 2yr up / 2yr down cycles, pointing to a 2025 peak. But the data just shifted. PMI, liquidity, and analysts all say the cycle hasn’t ended, it’s been extended. The top now looks more like 2026… or later”
- “FTX will release $1.6B in stablecoins to creditors today. That’s $1.6B in fresh liquidity about to hit the crypto markets. Fresh powder is on the way.”
Fig 1: Ethereum spot Daily Chart
Source: MNI - Market News/Bloomberg Finance L.P
