AUD slides ahead of Super Mario announcement

AUD is the only standout difference this morning versus other G10 pairs ahead of the ECB and BoE policy meetings today, following a weaker jobs report from Australia.

The employment change came in at 1.1k versus the expected 10k and the previous 9.1k. Full-time employment change fell to -27.9k versus the previous 5k as the participation rate came in at 64.8% – against the consensus of 64.9% – although I will stress that this has been a volatile reading over 2013. The data saw the AUD drop 50 points but stayed within the recent 0.9450-0.9550 range.

The BoE meeting today is unlikely to provide any policy change, with the focus likely to be on the inflation report next week; leaving the ECB as today’s main event following last week’s dismal inflation number, which triggered market expectations of a rate cut this month.

I think a cut is unlikely today, with ECB President, Mario Draghi, likely to continue with a dovish rhetoric highlighting the fragile nature of the euro area economy whilst further emphasising that rates are likely to remain at or below levels for an extended period of time.

This is a reminder to the markets that the ECB have all the tools available to stimulate the economy; including a further LTRO, while setting the stage for a December rate cut should the incoming data highlight further downside risks to the inflation outlook.

The data highlight this morning is the industrial production reading from Germany, with weekly jobless claims and US preliminary GDP data from across the pond this afternoon ahead of the jobs report tomorrow.

EUR/USD

Supports 1.3450-1.3420-1.3385  | Resistance 1.3555-1.3575-1.3600

USD/JPY

Supports 98.30-97.80-97.45  | Resistance 98.80-99.00-99.30

GBP/USD

Supports 1.6020-1.5985-1.5905   | Resistance 1.6125-1.6205-1.6260