AUD/USD Weekly Forecast – 06 November

Friday, Nov 03 2017

Events that marked the week:

There were no data releases from Australia on Tuesday, but from China official Manufacturing PMI figures were published. The official Purchasing Managers’ Index (PMI) released on Tuesday fell to 51.6 in October, from 52.4 in September, which was the strongest in over five years. It was the weakest reading in three months, but remained above the 50-point mark that separates growth from contraction on a monthly basis. Analysts surveyed by Reuters had forecast the PMI would fall slightly to 52.0, but still point to the 15th straight month of expansion.

On Wednesday Caixin China Manufacturing PMI figures were released. The Caixin China General Manufacturing PMI was 51.0 in October, unchanged from September and remaining in expansionary territory. The sub-index for output fell for the third straight month in October and was weaker than the average seen over the first 10 months of the year, even though growth in new orders picked up. The sub-indices for input costs and output prices both moderated from the previous month but remained at rather high levels. Stocks of finished goods and stocks of purchases lingered in contraction territory, although their paces of decline eased moderately from September.

Thursday's session was marked by Australian Trade Balance and Building Approvals figures. In trend terms, the balance on goods and services was a surplus of $1,061m in September 2017, an increase of $6m on the surplus in August 2017. In seasonally adjusted terms, the balance on goods and services was a surplus of $1,745m in September 2017, an increase of $872m on the surplus in August 2017. In seasonally adjusted terms, goods and services credits rose $924m (3%) to $32,961m. Non-rural goods rose $599m (3%), non-monetary gold rose $217m (17%), rural goods rose $5m and net exports of goods under merchanting rose $1m (2%). Services credits rose $102m (1%).

Separate report on Building Approvals showed that the trend estimate for total dwellings approved rose 1.8% in September and has risen for eight months. The seasonally adjusted estimate for total dwellings approved rose 1.5% in September and has risen for two months. The trend estimate for private sector houses approved rose 0.7% in September and has risen for seven months. The seasonally adjusted estimate for private sector houses rose 0.6% in September following a fall of 0.8% in the previous month.

From Australia, on Friday, Retail Sales figures. The trend estimate was relatively unchanged (0.0%) in September 2017 following a relatively unchanged estimate (0.0%) in August 2017 and a relatively unchanged estimate (0.0%) in July 2017. The seasonally adjusted estimate was relatively unchanged (0.0%) in September 2017. This follows a fall of 0.5% in August 2017 and a fall of 0.3% in July 2017. In trend terms, Australian turnover rose 2.0% in September 2017 compared with September 2016.

This week markets will be looking at:

Cash Rate/RBA Rate Statement (Tuesday 4:30)

China Trade Balance (Wednesday)

China CPI/PPI (Thursday 2:30)

More in this category: « EUR/USD Weekly Forecast – 30 October – 03 November GBP/USD Weekly Forecast – 06 November – 10 November »