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Earlier in the Day:

It was a busy day on the economic calendar through the Asian session this morning.

Economic data included October Service sector PMI numbers out of China and October BRC Retail Sales Monitor numbers out of the UK.

On the monetary policy front, the RBA also delivered its November interest rate decision and rate statement.

On the geopolitical risk front, chatter on trade provided support for riskier assets in the early part of the day.

Following talk of the U.S administration planning to issue licenses to U.S firms to sell to Huawei Technologies, there was also some chatter of pulling back on tariffs.

Out of China

The Caixin Services PMI fell from 51.3 to 51.1 in October. Economists had forecast a rise to 52.8. Supported by a pickup in manufacturing sector activity, however, the composite PMI rose from 51.9 to 52.0, its highest level since April.

According to the October Survey,

• Activity in the services sector expanded at a slower pace. By contrast, manufacturing sector activity rose at the fastest pace since December 2016.

• The Services Business Activity Index eased from 51.3 to 51.1 in the month. This was reportedly the slowest increase in activity in 8-months.

• New order growth in the manufacturing sector rose at its fastest pace since January 2013. For service sector firms, new orders rose at a more modest rate and at its slowest pace since February.

• At the composite level, new order growth held steady at September’s 19-month high.

• Export orders rose, in the manufacturing sector, for the first time since May. Supported by a modest increase across the service sector, new export orders rose for the 1^st time in 3-months at the composite level.

• Employment across the manufacturing sector fell in October, however, with the rate of job shedding the quickest in over a year.

• At composite level, employment fell for the first time in 3-months, supporting a pickup in outstanding work.

• Outstanding business at the composite level increased at its quickest pace since March 2011.

The Aussie Dollar moved from $0.68794 to $0.68852 upon release of the figures, which preceded the RBA’s interest rate decision.

For the Aussie Dollar

The RBA held rates unchanged at 0.75%, which was in line with market expectations.

According to the RBA Rate Statement,

• The outlook for the Australian economy is little changed from 3-months ago.

• The Centralia scenario is for the economy to grow by around 2.25% this year and then gradually pick up to around 3% in 2021.

• Uncertainties domestically continue to be driven by the outlook for consumption. A sustained period of modest increases in household disposable income continues to weigh on consumer spending.

• Other uncertainties include the effects of the drought and the evolution of the housing construction cycle.

• Employment has continued to grow strongly and has been matched by strong growth in labor supply.

• Unemployment is expected to remain at around 5.25% for some time before falling to sub-5% in 2021.

• Wage growth remains subdued and is expected to remain at current levels for some time yet. A pickup is needed for inflation to sustainably move within the 2-3% target range.

• Established housing market conditions continue to show signs of improvement, while new dwelling activity continues to decline.

• The easing of monetary policy since June is supporting employment and income growth and a return of inflation to the medium-term target range.

• It is reasonable to expect that an extended period of low-interest rates will be required for Australia to reach full employment and achieve the inflation target.

• The Board is prepared to ease monetary policy further if needed to support sustainable growth in the economy, full employment and the achievement of the inflation target over time.