Morning Call Script - 05 Dec 2023

Overnight asset drivers & the impending data calendar

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What’s Moved Overnight

• As expected, RBA held rates and maintained their "data dependent" outlook. This took AUD down 65bps to 0.6580 as the recent data has softened, namely the Oct inflation print. 

  • Reuters - Australia's central bank holds rates steady until at least February 

• Tokyo Inflation slowed... 2.3% vs exp 2.4%. Always it is seen as a good proxy for national inflation... USDJPY back down sub 146.80 after an initial pop to ~ 147.40. 

  • Reuters - Inflation in Japan's capital slows, clouds BOJ exit path | Reuters

• China's Caixin Services PMI's beat expectations - 51.5 vs 50.4 (leaving the composite 51.6 vs exp 50.0). This gave little support to APAC stocks which were all down over 1% (Nikkei -1.5%, CSI 1.3% etc).

• Gold opens around 2033/35 - failing yesterday to hold record highs and now firmly back below 2080-2100 breakout zone.

• FX - in a holding pattern overnight - EUR 1.0835, AUD 0.6580, CNH 7.15 and GBP 1.2633

• Fixed Income - a natural rebound in yields, clean up some of the overbought momentum stochastic indicators ahead of key US labour mkt data later this week. 

[Paid Subscribers] For greater detail on the overnight news stories as well as a focus on the day ahead, see The Morning Hark in your inbox around 7.15GMT (2.15 EST) whilst also watch out for Read on the Trading Floor around 17.30GMT (12.30EST), which captures the macro themes trending on Harkster.com over the past 24hrs.

Have a great day, and keep smiling!

Podcast for the Commute

• The Blind Squirrel Macro (Podcast) - Scooby-Doo and Vincent Vega walk into a bar.

The Day Ahead

• SEK (07:30): PMI

• EUR (08:55): German Final Nov PMI

• EUR (09:00): Eurozone Final PMI Readings

• EUR (09:00): ECB 1yr and 3yr CPI Expectations

• GBP (09:30): UK Final PMI

• CAD (14:30): Final Nov PMI

• USD (14:45): Final Nov PMI

• USD (15:00): JOLTS

• USD (15:00): ISM Services PMI and Employment Index

Stay informed throughout the day with our new commentary channel (‘Intraday Market Colour’) highlighting key notes, topics du jour, and HarksterHQ’s market updates around key data points and headlines. 

Available on the HarksterPRO Research Platform.

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The information provided in this post is for general information purposes only. No information, materials, services, and other content provided in this post constitute solicitation, recommendation, endorsement or any financial, investment, or other advice. Seek independent professional consultation in the form of legal, financial, and fiscal advice before making any investment decision.