The Australian dollar had a very steady night after trading up as high as 94.35 US cents before easing back to just below 94 US cents where it sat for the second half of the European and US sessions. The steady trading was a result of a market that believes that this game of political chicken will get resolved and the effect will be limited as per the times that it has happened before with the republican controlled Congress. The most surprising move was the Gold which didn’t rally post shutdown and as a result traders were quick to drop the yellow metal, with 45 dollars being stripped from the traded price across a 90 minuted period overnight. Gold is currently trading at 1290 USD an ounce after being as high as 1337 USD late in the Asian session yesterday.
Outside of the shutdown there was some interesting data out overnight with US ISM Manufacturing PMI peaking up above expectations to 56.2 which helped garner confidence in the US economy. The Euro had an interesting session trading to just below 1.36 USD helped by the shutdown at unemployment data which showed unemployment steady at 12% after being revised down for the previous month. The Euro did fall during the start of the US session and now is as low as 1.3520 USD with the Greenback’s confidence surge.
The local session today will be driven by top-tier Australian data with our Trade Balance deficit likely to shrink from last month and building approvals expected to fall month on month. These two items are up at 11.30am, and we also have HIA New Home Sales up today also. The US focus will remain in markets tonight but it will begin to focus on the economy rather than Government with the ADP Non-Farm Employment Change expected to show 177,000 new jobs. In Europe we have the ECB rates decision and importantly the following sound bite driven press conference.
