Australian Employment Report Disappoints

The big news of the morning so far has been the big miss in the Australian employment report. The change was expected to come in at a positive 15.2K but came in at -9.8K which was a huge miss. The AUD immediately dropped against all other currencies and continues to move lower still as we write this. This should be of serious concern to the RBA who, we are sure, would have been expecting some good news on the employment front. But the key going ahead would be the CPI data which will give the real strength of the overall economy and the RBA would be watching it keenly with the hope that it wouldn’t disappoint.

The other big news overnight has been the press conference from the BOC Governor who said that the BOC did consider easing the rates during their meeting and indicated that it is an option that they are likely to consider if the forthcoming data does not show a good improvement in the exports and in the general economy. This surprised the markets and led to some serious selling in CAD overnight which made the USDCAD pair push through 1.3100 and it sits at 1.3169 as of this writing.

The 3^rd US Presidential debate took place this morning as well but apart from the usual mud-slinging from either side, there was nothing new to be added to the debate and hence it did not cause much volatility in the markets except the strengthen of Mexican Peso as investors signaled that Trump has lost yet another debate. This was the last Presidential debate before the elections and the market would have been happy to have this over and done with.

For today, we have the ECB Minimum Bid rate and the ECB press conference following later and this is likely to cause some volatility in the euro related pairs which have gone into slumber of late and are at their range lows and have not been able to get themselves off the floor despite the general volatility in the market. Any mention of tapering of QE would be helpful to push the euro higher against other currencies but we will be watching the conference and the resultant price action keenly to look for short term direction.
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