AUD slumps in unusual reaction to hawkish RBA

"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.” - Warren Buffett

 

 

HEADLINES

 

 

• Dollar firms as Fed policy meeting gets underway
• GBP/JPY consolidates in low 155.00s after technical selling, BoE meeting looms
• Gold settles lower as traders await Fed policy decision
• Oil mixed in choppy trade before U.S. inventories, OPEC+ meeting
• Wall Street Continues Record Run as Jump in Healthcare Spurs Bullish Bets
• Musk says Tesla has not signed a contract with Hertz yet, halts stock rally

 

 

FOREX

 

 

Dollar firms as Fed policy meeting gets underway

 

The dollar firmed slightly on Tuesday as the U.S. Federal Reserve kicked off its two-day policy meeting where it was expected to announce it will begin tapering its massive asset purchases put in place at the start of the COVID-19 pandemic. Investors in recent weeks have priced in a wave of tightening from central banks as they bet policymakers are sufficiently concerned about rising inflation to end pandemic-era levels of easing.

 

Australian Dollar: RBA Makes A Small Hawkish Shift, But Markets Expect More

 

The RBA meeting on Tuesday saw a hawkish move as the bank dropped its yield curve control (YCC) and 2024 guidance for the first rate hike. This caused the Aussie to drop sharply in counter-intuitive move. While the RBA shifted slightly hawkish, the market has priced in a much faster pace of tightening and this could be a weight on the AUD if the RBA sticks to its projections.

 

GBP/JPY consolidates in low 155.00s after technical selling, BoE meeting looms

 

GBP/JPY has spent the majority of Tuesday’s session consolidating close to the 155.00 level and its 21-day moving average at 155.35. Since slipping below support at the 156.00 level on Monday, the pair has been trading with a negative bias, although the downside seen on Tuesday has more to do with broad yen strength rather than on Monday, which had more to do with broad GBP weakness at the time as a result of Brexit tensions and uncertainty regarding this week’s Bank of England rate decision.

 

 

COMMODITIES

 

 

Gold settles lower as traders await Fed policy decision

 

Gold futures settled lower on Tuesday, the first day of a two-day meeting of the Federal Reserve that’s expected to see policy makers lay out plans to begin reducing its monthly bond purchases.

With the Fed probably announcing a taper Wednesday and “maybe even laying the groundwork for rate hikes later next year, in keeping with hawkish shifts from central banks around the world in recent weeks and months,” gold may struggle.

 

Oil mixed in choppy trade before U.S. inventories, OPEC+ meeting

 

Oil traded below $85 a barrel on Tuesday, but remained close to a three-year high in choppy trade ahead of weekly U.S. supply reports expected to show a rise in crude inventories as traders also looked toward Thursday's OPEC+ meeting.

Brent's price has surged more than 60% in 2021. It hit a three-year high of $86.70 last week as global demand has recovered and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, have been slow to unwind record output cuts.

 

 

STOCKS

 

 

Wall Street Continues Record Run as Jump in Healthcare Spurs Bullish Bets

 

The major averages continued trade near fresh record highs Tuesday, led by health care stocks amid mostly bullish quarterly results just as the Federal Reserve kicks off its two-day meeting. Health care stocks led the broader market higher, with McKesson and Pfizer among the top gainers after reporting better-than-expected quarterly results.

 

Musk says Tesla has not signed a contract with Hertz yet, halts stock rally

 

Tesla Inc's top boss Elon Musk said the company had not signed a contract with Hertz, more than a week after the car rental firm announced a massive deal with the electric carmaker. Musk tweeted late Monday, "If any of this is based on Hertz, I'd like to emphasize that no contract has been signed yet."

 

 

CHART

 

 

Aussie dollar / Japanese yen – 4-Hour Candlesticks

Source: GKFX Prime Metatrader 4

AUD/USD has dropped below a rising trendline after a trip[le top at 86.0.  The broader trend is higher and potential support rests near 84.0. - Prepared by Trading Writers*

 

 

CALENDAR

 

 

*Times in GMT

Source: FX Street Economic Calendar

 

 

SOURCE

 

 

https://www.fxstreet.com/economic-calendar
https://www.msn.com/en-us/money/markets/gold-edges-lower-as-traders-await-fed-meeting/ar-AAQdPcP
https://www.exchangerates.org.uk/news/34324/2021-11-02-australian-dollar-rba-makes-small-hawkish-shift-markets-expect-more.html
https://www.fxstreet.com/news/gbp-jpy-consolidates-in-low-15500s-after-technical-selling-boe-meeting-looms-202111021910
https://www.investing.com/news/economy/currencies-wait-for-rba-to-kick-off-big-central-bank-week-2663516
https://www.investing.com/news/commodities-news/oil-prices-rise-on-slow-opec-oil-output-increase-2663535
https://www.investing.com/news/stock-market-news/wall-street-continues-record-run-as-jump-in-healthcare-spurs-bullish-bets-2664693