Risk Continues to Roll

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Market Drivers November 19, 2019
RBA Minutes send Aussie tumbling but it recovers
Risk on flows persist
Nikkei -0.53% Dax 0.79%
UST 10Y 1.82%
Oil $57/bbl
Gold $1467/oz
BTCUSD $8199

Europe and Asia:
AUD RBA Minutes

North America:
CAD Manufacturing Sales 8:30

FX was generally quiet in Asian and European session trade today with most of the pairs contained to narrow ranges as low volatility conditions persisted.

In Australia, the release of the RBA minutes caused a flutter in Aussie as the text came in dovish with monetary authorities agreeing that a ‘case could be made’ for a rate cut at the November meeting. This was prior to the poor employment data which only added to the argument for easing.

However, the RBA is also clearly concerned with the limits of lower bound and some analysts do not think the central bank will ease until February, preferring to keep its policy options flexible to maintain maximum impact.

After spending most of Asia under the .6800 figure, Aussie rebounded and traded higher with the rest of the risk complex as US Stock index futures made fresh highs.

Despite numerous hot spots around the world, slowing growth globally and mediocre consumer demand and wage growth capital markets continue to rally on the prospect of easy money from G-3 central banks. It’s impossible to know how long this dynamic will last but for now, the path of least resistance for risk assets is up and that suggests that USDJPY could make another run for the 109.00 figure as the day proceeds.

Boris Schlossberg
Managing Director

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