Daily analysis 01 NOVEMBER 2022

• The RBA raised interest rates by 25 basis points in line with market expectations (current rate 2.85%). AUD weakened after the decision but erased losses ahead of European session. RBA action indicates that global central bank pivot is underway
• The RBA indicates that hikes and inflation are limiting household strength. However, inflation expectations remain above target until at least 2024
• Inflation in Australia is expected to peak at around 8% this year
• Holiday and day off in Poland and Hungary. There are also elections in Israel
• Tokyo Commerce Chamber urges Bank of Japan to change its policy – yen strengthens after these comments
• Japan’s PMI print was 50.7 points – the same as in September
• Lagarde indicates that the interest rate target has not yet been reached. At the same time, she indicates that the future interest rate level must ensure that inflation reaches the 2% target, but the risk of recession has increased
• China’s Caixin manufacturing PMI index rises to 49.2 points with expectations of 48.5 and the previous level of 48.1 points.
• Despite the economic slowdown and relatively low inflation, the PBOC is pulling money from the market. The yuan hits 15-year lows today.
• Indices rebounded during the Asian session, despite yesterday’s declines on Wall Street. Hong Kong’s technology index rose more than 5% in the morning, the Hang Seng gained more than 3%, the Shanghai Composite rose nearly 2%
• South Korea’s exports fall for October for the first time in 2 years, showing a continued weak outlook for Asian economies. Korea’s PMI is also below 50 points.
• The dollar is weakening in the morning. The strongest currencies against the dollar are the EUR, GBP and CAD.
• Indices on Wall Street decreased yesterday. The S&P 500 lost 0.75%, while the Nasdaq was lower by 1.03%. Wall Street was reducing gains after yesterday’s statement by Biden, who asked Congress to impose an additional tax on energy companies that refuse to increase production of oil, gas or other products, despite record profits

AUDUSD decreased immediately after the RBA’s decision but erased losses ahead of the European session.