NZD: NZD/USD - A Little Softer Within Its Range

The USD/JPY range today has been 155.21 - 155.59 in the Asia-Pac session, it is currently trading around 155.35, -0.10%. The move lower in risk did not bring the usual bout of Yen buying as its safe haven status begins to be questioned. USD/JPY I suspect will remain well supported on dips as the market remains wary of the new leadership policies together with a reticence to hike rates. I will be watching again for dips on the day back toward 154.80-155.00 to be supported initially. This break should now turn the markets focus back toward 160, much to the displeasure of the MOF/BOJ. Look for any pullback towards the 152.50 area to be well supported first up if seen.

• MNI AU -  Core Machine Orders Surge, Reinforcing Positive Capex Backdrop: Japan Sep core machine orders were comfortably above market forecasts, although arguably this was a risk after the recent Q3 GDP preliminary print (which showed stronger than expected business spending in Q3). From a policy makers standpoint, it suggests resilience/strength in the business/capex sector (reinforcing what the Q3 GDP print stated). Focus will be on if these trends sustain into Q4, while the wage outlook is also a key BoJ watchpoint. Our policy team notes that key wage data will not be available until the Jan policy meeting next year. This sets up a possible Dec hold from the BoJ (although sharp yen weakness could prompt a move).
• Options : Close significant option expiries for NY cut, based on DTCC data: 153.00($1.26b). Upcoming Close Strikes : 155.00($1.49b  Nov 20), 150.00{$1.3b Nov 20) - BBG.
• The USD/JPY Average True Range(ATR) for the last 10 Trading days: 97 Points

Fig 1 : USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

The AUD/USD has had a range today of 0.6477 - 0.6512 in the Asia- Pac session, it is currently trading around 0.6480, -0.40%. The AUD/USD has drifted lower in our session giving back a lot of its overnight gains. The markets focus for risk will now turn toward the Nvidia results which come out in the US session. The AUD/USD continues to chop around within its wider 0.6350-0.6650 range, first support back toward 0.6440-0.6460 which has been pretty solid the last couple of months, then 0.6350 below that. It would need this move lower in risk to accelerate and become something more significant to challenge down there I would think. 

• MNI AU - Westpac Lead Indicator Consistent With Ongoing Recovery: The Westpac leading index rose 0.11% in October up from -0.01% bringing the 6-month annualised rate to 0.35% from 0.1%. The increase was due to stronger consumer confidence. The 6-month rate leads trended growth by 3-9 months and so is consistent with the recovery gaining into H1 2026. The index had been around neutral since April, when the US announced reciprocal tariffs.
• MNI AU - Wages Stabilise But Private Sector Rises Moderating: Q3 wages rose 0.8% q/q to be 3.4% higher on a year ago, in line with Q2 and Bloomberg consensus, signalling a stabilisation consistent with SEEK advertised salary data. In November, the RBA forecast 3.4% y/y for Q4 2025 before moderating to 3% by end 2026. Thus, the Q3 WPI data doesn’t change the outlook for monetary policy with rates likely on hold towards at least mid-2026 as it monitors price and capacity pressures.
• Options : Closest significant option expiries for NY cut, based on DTCC data: 0.6500(AUD640m), 0.6300 (AUD445m). Upcoming Close Strikes : 0.6550(AUD2.28b Nov 21) - BBG
• The AUD/USD Average True Range for the last 10 Trading days: 48 Points

Fig 1: AUD/USD spot Daily Chart

Source: MNI - Market News/Bloomberg Finance L.P

Bank Indonesia’s decision is announced today and 29/35 analysts on Bloomberg expect rates held at 4.75% (see MNI BI Preview). However, recently it has gone against consensus. In October, it held when it was forecast to ease. With inflation firmly within its band, BI is likely to focus on broad-based rupiah weakening but also the limited pass through of 2025’s 125bp of easing to lending rates. Its three consecutive cuts in Q3 and statements that it would support government policy, which is expansionary, signalled a shift to a pro-growth stance.

• Trade and survey data since the October meeting have signalled stronger Q4 growth to date but the details show some weakness such as soft imports, wages and foreign orders.
• Q3 GDP slowed slightly to 5.0% y/y from 5.1% driven by weaker investment but was supported by a pickup in government spending. BI expects 2026 GDP to rise to 5.3% and said that it will continue to support the government’s pro-growth measures.
• Q3 consumption slowed marginally to 4.9% y/y from 5.0% but consumer sentiment fell 1.9% q/q. It rebounded in October to 121.2 from 115.0 despite Q3 manufacturing wages rising only 0.7% y/y after Q1’s 2.1%.
• October S&P Global manufacturing PMI rose to 51.2 after averaging 50.4 in Q3 driven by stronger domestic orders and associated increase in hiring. However, it underperformed ASEAN.

Indonesia activity outlook

Source: MNI - Market News/LSEG/Bloomberg Finance L.P.

• Robust merchandise export growth at 11.4% y/y drove the September 3-month average trade surplus to its highest since December 2022. Shipments to China, US, Europe, Singapore and Thailand have been strong but weak to Japan, India and Australia.
• However, 3-month average import growth fell 1.7% y/y, a sign of soft domestic demand.
• Tourist arrivals are also slowing but still rose 9.6% y/y 3-month average in September but down from 20.7% a year ago.

Indonesia merchandise exports vs imports y/y% 3-mth moving average

Source: MNI - Market News/LSEG