ForexLive Asia-Pacific FX news wrap: RBA on hold, China PMI hits a 3 month high

• AUD little changed after hawkish RBA
• Reserve Bank of Australia leaves cash rate unchanged at 4.35%, as expected
• Reserve Bank of Australia statement due at the bottom of hour – on hold expected
• European Central Bank President Lagarde speaking Tuesday, Schnabel also
• Tokyo Stock Exchange extended trading hours for 1st time in 70 years, starting today.
• China’s Premier Li – government is capable of advancing strong economic growth
• Cross currents for GBP – slower pace of rate cuts vs. wobbly confidence on fiscal
• China Caixin Services October PMI 52.0 (50.3 prior)
• PBOC sets USD/ CNY reference rate for today at 7.1016 (vs. estimate at 7.1019)
• RBNZ Governor Orr says economy is lagging rate cuts, which is a concern
• UK – British Retail Consortium (BRC) total sales in October, weakest growth since July
• RBNZ says economic conditions remain challenging, business is doing it tough
• New Zealand October commodity price index +1.4% m/m (prior +1.8%)
• Citi says gold could get sold off after the US election
• South Korean October headline CPI is the lowest in more than 3.5 years
• BlackRock says traders are still pricing Federal Reserve rate cuts too aggresively
• Australia weekly consumer sentiment survey comes in at 86.5 (prior 86.4)
• North Korea fires off another ballistic missile
• Australian October services PMI (final) 51.0 (September was 50.5)
• Bank of America point to a strong earnings season
• Positioning for the US election – Trump win likely means higher inflation, higher rates
• Down day to start US election week
• Forexlive Americas FX news wrap: Equity markets sag as we hit the final stretch
• Trade ideas thread – Tuesday, 5 November, insightful charts, technical analysis, ideas

The
Reserve Bank of Australia held its cash rate steady at 4.35% in an as
expected decision today. The Bank pointed to:

• Underlying
  inflation remains too high
• Inflation is not
  expected to return sustainably to the midpoint of the target until
  2026
• The labour market remains tight, and demand for
  labour is strong.

The
Bank did lower its forecasts for growth and underlying inflation a
touch, though not enough to signal any imminent rate cuts. As I said
in the posts on the decision:

• Analysts
  were looking for a February rate cut going into this meeting while
  market pricing was around May. I don’t think those expectations will
  hold in the face of today’s policy statement from the Bank. Higher
  for longer.

AUD/USD barely moved on the RBA news.

Ahead
of the Reserve Bank of Australia was the other focus for the session,
China second services PMI for October.

The
private-sector services PMI notched up 22 consecutive months in
expansion, accelerating to a three months high in October. There were
some indications that Beijing’s stimulus efforts were boosting
business conditions.

Major
FX traded in limited ranges awaiting the week’s big event (no, not
the Melbourne Cup horse race). Getting non-partisan views on the US
election is a difficult task but, FWIW, pundits indicated a slowing
momentum for Trump and an improving one for Harris. Most polls remain
line ball.

Yen weakened a little:

This article was written by Eamonn Sheridan at www.forexlive.com.