Aussie struggles near lows even as retail sales beat estimate

AUD/USD fails to advance

AUD/USD was only given a temporary respite from the four-day selling pressure after a better-than-expected print for retail sales. Sales rose 0.3% m/m, a faster pace than the 0.2% economists had expected and represented the eighth straight month that the number has not been negative. So, spending appears to be steady, all the RBA would like to see know is a pickup in wages and a reduction in household debt before it might contemplate thinking about its current policy stance.

AUD/USD was at 0.7064 prior to the data, the lowest since February 2016, and managed a mild recovery to 0.7082 after the release. That rally proved to be only fleeting and the FX pair fell to 0.7062, a new low in more than 2-1/2 years, and is currently sitting at 0.7067.

AUD/USD Hourly Chart

Source: Oanda fxTrade

China’s spies, election meddling and NFP to keep traders busy

US nonfarm payrolls is the headliner

The markets focus will be squarely on the September release of the US September nonfarm payroll report, with all other data points likely to be a mere sideshow.

US Jobs Report to Guide Markets

The latest survey suggests the US added 185,000 jobs in September, below the 201,000 recorded in August and also below the 6-month moving average of 192,000, which has been trending lower over the past two months. Nevertheless, such a print would still confirm the robust state of the economy and keep US yields supported. Average hourly earnings surged higher in August and that trend is expected to continue into September with a 2.8% y/y gain. Unemployment is expected to again hit an 18-year low of 3.8%.

Prior to the payrolls fun and games, Germany reports producer prices and factory orders for August along with UK’s Halifax house prices for September. The same time as the US release, we also see Canada’s jobs data for September and trade numbers for August. Lost in all the other releases will be the US trade balance for August, which is expected to show a widening of the deficit to $53.5 billion from $50.1 billion.

You can view the full MarketPulse data calendar at https://www.marketpulse.com/economic-events/

Have a great weekend from Asia

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