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AUD steadies ahead of a heavy data week

Published October 15, 2018

Author: Dennis Li

Data released last Friday showed China’s exports appeared to be a rush to beat the tariffs,  jumping 14.5% in September making a record trade surplus with the US amid the escalating trade war between the world’s two biggest economies. Over the weekend we saw the AUD hover near its weekly high above 0.7100 against the USD and edged higher against both euro and sterling before the EU summit this week where a Brexit deal could be reached and Italy’s budget will be discussed.

  • US Treasury Secretary Steven Mnuchin said on Friday that he told China’s central bank chief that currency issues need to be part of any further US-China trade talks with the intention to include a provision to deter currency manipulation in future trade deals.
  • ECB President Mario Draghi said on Saturday that Italian officials must stop questioning the euro and need to ‘calm down’ in their budget debate.
  • According to an IMF senior official on Sunday, Italy should abide by the European budget rules and must settle its differences with the EU.
  • China central bank governor Yi Gang said on Sunday he still sees plenty of room for adjustment in interest rates and the reserve requirement ratio, as downside risks from trade tensions with the US remain significant.

Besides the EU summit and Brexit, we also see local meeting minutes from the RBA tomorrow, employment data on Thursday while externally we have US retail sales data released tonight, Japanese Trade Balance on Thursday, Chinese inflation data (on Tuesday), GDP and retail sales (on Friday).