Themes

• General mood is “risk off”
• No major data overnight, USD generally strengthens against the majors
• Focus today on he RBA Rate Announcement, with no change in rates expected

What’s Moving

Currencies saw the bullish USD bias continue in European and North American trade, with the Dollar seen gaining against the Yen and the Swiss. Flows remained light however, but a strong dip bias has emerged.

The AUD/USD saw some volatility overnight ahead of today’s RBA rate announcement. No change is expected, with Australian bond buying still to continue, but risk is to a tightening.

U.S. stocks were firmer over the day, with the large caps outperforming on rotation into large cap stocks continues ahead of the holiday period.

Thoughts

We could have an interesting day today, but it will all be data and event specific. Today we see the Japanese Household Spending (E: -0.6%) and Chinese Trade (E: 583bln) numbers, but the real focus will be on the Reserve Bank of Australia’s rate announcement.

Noone is really expecting any change on Australian rates today, although the bias would be towards a hike. A hike in rates, even a small one, would see a strong AUD bid emerge.

Pivot Points