Gold surges a new record high over US$3,800/oz and US bond yields fall as fears of a US Government shutdown escalate. In Australia, the Reserve Bank is expected to hold the cash rate today, possibly with a hawkish tone.
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5 things to know in 5 minutes:
Gold jumped through US$3,800/oz overnight as worries grow that the US Government may shut down as early as Wednesday if President Trump is unable to agree new funding later today with Congress. However, in this part of the world the focus is on the Reserve Bank of Australia’s expected hold at 3.6%, says ANZ Senior Rates Strategist Jack Chambers.
Jack says the focus after a hold then switches to the tone of the RBA’s commentary.
ANZ Head of FX Research Mahjabeen Zaman says the Aussie dollar has done well in recent weeks, thanks to market expectations that the RBA may not cut much, while the Fed may cut more, making the A$ relatively more attractive for traders carrying Aussie dollars.
The Aussie dollar has also strengthened a lot against the Kiwi dollar, again thanks to diverging expectations on interest rates between the RBA and the Reserve Bank of New Zealand.
New Zealand’s economy generated a 0.2% increase in jobs in August, with some industries showing some promise after a long slow period, says ANZ Senior Economist Matt Galt.
Cheers,
Bernard.
PS: Catch you tomorrow with all the analysis and reaction to today’s cash rate decision by the Reserve Bank of Australia.
