Daily Digest Market Movers: Australian Dollar depreciates due to risk-off sentiment
- The CME FedWatch Tool indicates that markets are assigning a 65.4% probability to a 25 basis point rate cut by the Federal Reserve in November, while the likelihood of a 50-basis-point cut is 34.6%, down from 57.4% a week ago.
- The Israeli Broadcasting Authority (IBA) reported that Israel's security cabinet has decided to issue a strong response to the recent Iranian attack. On Tuesday night, Iran launched over 200 ballistic missiles and drone strikes on Israel. Citing political sources in Tel Aviv, the report indicated that while the response will be severe, it is not expected to escalate into a regional war.
- Australia's Judo Bank Services Purchasing Managers' Index (PMI) posted a reading of 50.5 in September, down from 52.5 in August. This indicates the eighth consecutive month of growth in services activity, albeit at a slower and marginal rate. Meanwhile, the Composite PMI declined slightly to 49.6 in September, compared to 49.8 in the previous month, data showed on Thursday.
- Federal Reserve Bank of Richmond President Tom Barkin addressed the Fed's recent rate actions on Wednesday, warning that the fight against inflation may not be over, as risks still persist. Barkin noted that the 50 basis points (bps) rate cut in September was justified because rates had become "out of sync" with the decline in inflation, while the unemployment rate was near its sustainable level.
- The ADP Employment Change report showed an increase of 143,000 jobs in September, surpassing the forecasted 120,000 jobs. Additionally, annual pay rose by 4.7% year-over-year. The total number of jobs added in August was revised upward from 99,000 to 103,000.
- The AiG Industry Index slightly improved in September, rising 4.9 points to -18.6 from the previous reading of -23.5, though it still signals contraction for the 29th consecutive month. Meanwhile, the AiG Manufacturing PMI continued its decline, falling 2.8 points to -33.6 from -30.8 prior, marking the lowest level in trend terms since the series began.
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