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Markets begin to focus on US politics

  • GBP Manufacturing PMI: 55.4
  • USD ISM Manufacturing PMI: 51.5
  • AUD Building Approvals m/m: -1.8%
  • RBNZ Gov Wheeler Speaks
  • AUD Cash Rate: 1.50%
  • AUD RBA Rate Statement

The US Presidential election will begin to steal the spotlight this month as the election is now only five weeks away. The Non-Farm Payrolls reading scheduled for release on Friday may have less impact this month because of the impending election, given that the current market pricing has less than a 20 percent chance of the Fed moving rates a week before the vote. The markets are forecasting a December rate hike but that could all change if the unthinkable happens and Donald Trump is elected President.

Yesterday’s economic docket was dominated by manufacturing data from the UK and across the pond. Firstly, UK Manufacturing PMI exceeded economists’ consensus by registering at 55.4, its highest reading since November last year. This figure shows consecutive months of expansion for the UK’s secondary sector.  Shortly after, US ISM Manufacturing PMI registered an improved reading of 51.5, a reading above 50 indicates expansion and below contraction.

  • EUR Spanish Unemployment Change
  • GBP Construction PMI
  • NZD GDT Price Index
  • AUD Retail Sales m/m

There is a rather light data calendar today, with UK Construction PMI as the main focus, it is forecast to move back to expansion. Overnight, we will see the rate decision from the Reserve Bank of Australia released which is expected to hold rates at 1.5%. Otherwise the market may find further stimulus in Federal Reserve Member Lacker’s speech.