Australian dollar rises mildly today as RBA kept the cash rate unchanged at 2.00% in October. The accompanying statement contained few changes, suggesting that policymakers' view on the economic outlook stayed largely the same as the previous month. The updates, however, indicated that the central bank has turned more confident over the growth outlook. It also hinted that more regulatory measures have been implemented to contain the housing price surge in Sydney, as well as Melbourne. We retain the view that the RBA would leave the monetary decision unchanged for the rest of the year. More in RBA Left Rate Unchanged, More Confident Over Domestic Developments.
Also released down under, Australia trade deficit widened to AUD -3.1b in August versus expectation of AUD -2.36b. New Zealand NZIER business opinion survey dropped to -14 in Q3. From Eurozone, German factor orders dropped -1.8% mom in August, much worse than expectation of 0.5% mom rise. Swiss CPI, Eurozone retail PMI will be the main focus in European session. Later in the day, US and Canada will both release trade balance. Canada will also release Ivey PMI.
The US has finally reached the Trans Pacific Partnership (TPP) deal with Japan and 10 other countries in the Asia Pacific rim. The pact is believed to aim at curbing China's power. According to President Barack Obama, "when more than 95% of our potential customers live outside our borders, we can't let countries like China write the rules of the global economy". He noted that the partner countries should "write those rules, opening new markets to American products while setting high standards for protecting workers and preserving our environment". The deal still needs to get the Congress approval before adoption. Despite diminished prospects of a rate hike this year, US Treasury yields jumped and the decline in USD was contained after announcement of the deal.