Aussie steadies as oil-fuelled risk rally offsets weak domestic surveys
TLT•The Australian dollar eased 0.1% to $0.6916 after gaining 1% overnight, as lower oil prices supported risk assets despite weak Australian surveys. Consumer sentiment hit a four-year low, while business conditions remained in negative territory; Australia’s 10-year bond yield fell 3 basis points to 4.993%.
1. Currencies and surveys
The Australian dollar eased 0.1% to $0.6916 on Tuesday after rallying 1% overnight, as a plunge in oil prices fuelled gains in risk assets. The New Zealand dollar held at $0.5633 after jumping 1.6% overnight. Australian consumer sentiment hit a four-year low in November, while business conditions remained in negative territory, a level not seen in six years.
2. Rates and bonds
The Reserve Bank of Australia has raised its interest rate to 4.85%, an 18-year high, while core inflation was 3.6% in September, above its 2% to 3% target band. Swaps implied an 82% probability that rates had peaked, with a quarter-point cut fully priced in by the end of 2027. Australia’s 10-year government bond yield fell 3 basis points to 4.993%, and New Zealand’s dropped 5 basis points to 4.738%.
