Asia Summary and Highlights 4 Nov
RBA hold as expected
Asia Session
As expected, RBA holds rate at 3.6% as expected. With headline monthly inflation rising to the upper band of target range in Q3 and show little signs of moderation in October, the RBA thus revised their inflation forecast higher and see both trimmed mean and headline CPI to be above target range throughout most of 2026. They also only assume one more rate cut in 2026, which bring rates to around 3.35%. AUD/USD is trading 0.15% lower at 0.6527, NZD/USD is trading 0.32% while USD/CAD rises 0.07%.
The USD is trading broadly higher so far on Tuesday's Asia session. The broad risk atmosphere also looks sour as major equity indexes are all in the red. We are hearing from Japanese PM Takaichi that she thinks Japan has yet to sustainably hit the inflation target. USD/JPY is trading 0.31% lower at 153.75 on risk aversion. Else, EUR/USD is down 0.08% and GBP/USD is down 0.12%.
North American session
October’s ISM manufacturing index was weaker than expected at 48.7 from 49.1, with prices paid falling to 58.0 from 61.9. USD/JPY slipped to 154 from 154.20 after the release but gradually recovered to near 154.20. EUR/USD picked up to 1.1535 from 1.1510 before correcting to 1.1520. There was little movement in EUR/GBP but EUR/CHF gains extended above .93. The USD made marginal gains versus AUD and CAD.
There was plenty of Fed talk, Miran dovish and Goolsbee, Daly and Cook all fairly moderate, though Daly was less dovish than her recent tone, which is notable though she does not vote this year or next.