The dollar is starting November on a firm footing, edging higher against a basket of its major rivals after Federal Reserve Chair Jerome Powell last week repeatedly warned markets against expecting more monetary easing in December. Over the past four sessions, front-end rate differentials have shifted slightly in favour of the greenback—enhancing its relative appeal—and strong earnings from a number...

• Upbeat tone. US equities end the week & month on positive footing. USD ticked higher. AUD & NZD drifted back. AUD a bit firmer on a few cross-rates.• RBA meeting. Given CPI RBA expected to hold (Tues). Near-term inflation forecasts to be revised up. Will RBA close the door on more cuts?• Event radar. In addition to the RBA, NZ jobs report due (Weds). In the US, official data may be delayed,...

Financial markets are turning more cautious this morning as traders process the implications of an unexpectedly-divided Federal Reserve decision, news of a tentative trade truce between the US and China, and a mixed slate of earnings from the world’s largest technology firms. The dollar is maintaining yesterday’s advance, ten-year Treasury yields are holding near 4.06 percent after posting their biggest...

• Fed gyrations. US Fed cut rates but Chair Powell pushed back on views it will go again in December. Higher US yields helped the USD intra-day.• AU CPI. Sizeable upside surprise in Q3 AU inflation. RBA expected to stay on hold. We think this should be AUD supportive over the medium-term.• Macro events. BoJ meets today. ECB holds court tonight. Also on the radar is a meeting between President’s...

The Federal Reserve cut rates for a second time this year in a move best characterised as a “risk management” cut, as officials try to prevent nascent signs of a slowdown in labour markets from turning into a full-blown downturn. In a well-telegraphed and fully-priced decision, the Federal Open Market Committee voted along divided 10-to-2 lines to lower the target range for the federal funds rate to...

The Bank of Canada delivered another rate cut this morning, as widely expected, but clearly signalled that policy rates are now near neutral—implying that further easing is unlikely in the absence of a material shift in economic conditions. Policymakers led by Governor Tiff Macklem lowered the policy rate by 25 basis points to 2.25 percent after cutting by the same amount in September. In the official...

A confluence of positive catalysts is lifting risk-sensitive currencies and asset prices this morning. The Federal Reserve is widely expected to deliver a quarter-point rate cut and bring its quantitative-tightening programme to an end this afternoon. According to the Wall Street Journal, President Trump is weighing a reduction in tariffs on Chinese imports, and market sentiment has been further buoyed...

So much for the inflation dragon being slayed. The Q3 Australian CPI data was a jolt to the system. Headline inflation rose 1.3% in Q3 to be 3.2% higher compared to a year ago, while the trimmed mean (the RBA’s preferred gauge which gives a better guide to inflation persistence) rose 1% in the quarter or 3%pa. Inflation momentum has turned up with 3-month and 6-month annualised run-rates at levels...

• Positive vibes. Gains across the tech-sector pushed US equities to record highs. Base metals rose. AUD outperforms ahead of AU CPI data.• AU inflation. Q3 CPI due today. Acceleration in core inflation forecast. RBA rate cut expectations have been pared back. This might have further to go.• US Fed. Another US Fed rate cut anticipated tomorrow morning. Guidance will be important. USD volatility likely...

Global financial markets are starting the week on a buoyant note, with risk-sensitive assets climbing amid hopes of a more lasting thaw in US-China trade relations. The dollar is retreating, benchmark Treasury yields are pushing lower, and equity futures are rising after negotiators on both sides said they had made significant progress on issues including tariffs, fees, and export controls in the weekend’s...