Aussie dollar gains, gold dives on US China optimism
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What market shifts set the tone for the Tuesday morning call?
Well, there's been a bit of a change of mood. Gold has fallen a lot. The Aussie dollar has gained in increased optimism that X and Trump will sign a deal this week. Michelle Bullock might also have helped the Aussie dollar a bit too, and maybe the PPOC as well. Uh meanwhile, no deal is imminent with Canada. But what about Japan? Because Trump is travelling there with meetings ahead of APEC. We'll look at all of that. It's Tuesday, it's the twenty-eighth of October, twenty twenty-five. It's the morning call for NAB. Morning. Well, a small move down in the US dollar, but a naught point six percent lift in the Aussie. It's up above sixty-five point five US cents. Uh the only significant move really of the major currencies.
Uh the Nasdaq has climbed one point seven percent, the one percent lift for the S P, but the NICAR yesterday, two and a half percent up, almost twenty seven percent year to date. Actually doing better than the Nasdaq and compared to just eleven percent for the ASX two hundred uh for the year to date. Bond yields are Generally lower, not by much though, just one or two basis points here and there, although down three basis points for Canada and UK ten year yields, and Australian ten years up a couple of basis points overnight to four point one eight percent. No big moves for oil, but a two point six percent fall in spot gold. It did drop below the four thousand dollar mark.
How did the Aussie dollar outperform other major currencies today?
Silver losing three point nine percent today as well. So he is nav's reatural. Look, four Falling gold, so less risk, rising Aussie dollar, less risk. Can we tie those two together? And is that all to do with, you know, the hope for the US China trade deal or is the Aussie a bit more to do with what Michelle Bullock was saying yesterday? Or a bit of both?
All of the above I think. Good morning, Phil. That uh I think it's th three things you have to point to that uh the outstanding outperformance that uh let's put it in context. We've sort of gone from sort of sixty five to sixty five and a half, effectively, since uh since we all went home on Friday. I think there's three things, you know, as you already uh discussed yesterday, the mood music coming out of the um the weekend meetings that took place between Scott Bessent and uh and counterparties from China. in um in Malaysia, you know, giving a pretty strong hint that um by the time Presidents um Xi and Trump meet in the on the fringes of the APIC meeting in Kuala in South Korea later this week, then there is going to be you know a renewed detente of sort.
And I think that was the primary driver of the jump up that we saw right at the open, as you mentioned in in yesterday's podcast. But we have extended Those gains slightly. And the two things that I've mentioned, um, we'll come on to Michelle Bullock momentarily, is that yesterday the the PBOC set the daily fixing for the US dollar against the Chinese Rem Nimbi at its strongest level for the uh for the WAN since I think the 15th of October last year. They actually set it below uh 7.11. So the dollar CMY spot rate that had been traded. sort of between 712 and 712 and a half. Um, you know, for most of last week, you know, it was actually crunched below 7.11, which in the context of daily moves is actually quite a sizable move.
And we obviously talk ad nausea about the uh relationship between the Remnimbi and the Aussie, uh even sort of Xing out the uh the common denominator, which is the US dollar, the sort of beta to to Aussie to moves in dollar C. and why is stronger than it is against most other major currencies. So I think that has given it a little bit of impetus. And then of course Michelle Bullock, who was speaking at the ABE's annual dinner in a in a fireside QA. I'm not sure why we have fireside QA's inside buildings, but that that's another that's topic
For another day, isn't it? But uh but you would have thought it would be a r a risk and everyone would have to flee the building. But yes. She's just back from the IMF in New York, of course, and it was uh yeah, she said a bit more than most people were expecting, didn't she?
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Chapters
6 chapters
1
What market shifts set the tone for the Tuesday morning call?
0:01–1:12
2
How did the Aussie dollar outperform other major currencies today?
1:12–3:42
3
Why did gold and silver prices plunge and what does it mean for risk appetite?
3:42–7:18
4
Is the US‑China trade optimism driving the Aussie’s rally?
7:18–9:35
5
What did RBA Governor Michelle Bullock say in her fireside chat and how might it affect rates?
9:35–12:47
6
How are Canada‑US tariff talks influencing market expectations?
12:47–15:34