University of Michigan Consumer Sentiment came in at 92.6 vs 92 expected with some of the component indexes recording the highest sentiment numbers since 2002. House Prices also showed a mild improvement from an average of $302,700 to $305,000. While not so much outperforming the data keeps the Fed on an active hiking trajectory and as such the USD gained slightly overnight more so against the EUR.
AUD NZD and CAD firmed slightly overnight with commodity prices just bumping slightly higher on position adjustment more than any real fundamental news. Iron Ore, Copper and Oil are all forecast to see losses into 2016 as production is seeing no signs of slowing while the main hope among big producers seems to be to drive out all the smaller start-up firms by pushing prices to unsustainable levels for them.
GBP saw Q3 GDP Final QQ come in at +0.4 vs +0.5 expected this helped the GBP to stabilize against recent falls and despite a 700 point drop seen over the last month heading into 2016 GBP seems better placed than some of the other major currencies to absorb what looks likely to be further USD Strength.
Stocks had a positive night overall as with the commodity bounce and signs that the US Economy would be able to handle the rate rises that appear certain to come some of the uncertainty was removed. The consumer sector is obviously the most efficient way to drive an economy forward and allows the government to lower the throttle to allow a more natural rebalancing to take place.
In China after a period of allowing the Yuan to weaken for 7 straight days the PBOC has allowed it to strengthen slightly just giving the markets time to catch their breath before entering 2016. Into next year if the USD trend higher continues we may see several efforts on behalf of the Chinese to adjust the rate to better support their local exporters which certainly would be concerning to commodity producers here in Australia.
AUDUSD Summary
* Slightly higher with Oil up 2% overnight
* Stock Markets bounced back supporting risk sentiment
* PBOC has allowed the Yuan to firm slightly after 7 days of losses
* With so many holidays it is easy to sell EUR and buy AUD and look to lock in Forward Points in low volatility trading.
* majority of forecasters seem comfortable with a 66-73 range into 2016