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Market Update

EncoreFX’s daily market updates are written by our experienced and professional dealing team.

What is it about October?

Published November 1, 2018

by Nicholas Cork

The Q3 CPI yesterday will continue to keep the RBA’s gunpowder dry as it came in at the lower end of the range, backed up by the release of Chinese Manufacturing PMI falling to two year lows at 50.2

With these PMI index’s, 50 is the dividing line between expansion and contraction, and there is a new China Index from satellite imagery that has just released a result for October that is below 50 for the first time in 18 months.

All of this should conspire to keep the AUD contained as it enters its 21st trading day within 0.7020/0.7160, and combined with a very ordinary auction clearance rate last weekend and an unelected PM, if the investor/speculator world looks at our domestic situation closely well ….. 0.7150 may be a stretch at the moment as recent lows come back in focus. AUDEUR and AUDGBP continue to outperform.

After all the equity noise, the DOW only lost 5% between end Sep and start Nov. How much does history try to repeat itself each October, and is it really now just human behavior, media attention and anticipation? To see un- anticipated action it’s more compelling if you look at the DOW from the 1st Nov 2017 when it was at 23,400, by Australia Day 2018 it was up roughly 15% at 26,600, two weeks later it was ….. down 15% @ 23,400. Now that is volatility.

And by the way, Bitcoin just turned 10 years old.