NAB Morning Call Aussie dollar gains, gold dives on US China optimism
Oct 27, 2025
Ray Attrill, a Senior Markets Strategist at NAB, dives into the recent market shifts, spotlighting the Aussie dollar's surprising rise influenced by US-China optimism. He discusses the impact of the PBoC's stronger yuan fixing and how RBA Governor Michelle Bullock’s cautious remarks recalibrated expectations for a November rate hike. The conversation also touches on key US economic indicators and the evolving landscape of global trade, providing listeners with valuable insights into current market dynamics.
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Risk-On Move Drives FX And Metals
- Markets moved with rising risk appetite: gold fell sharply while the Aussie dollar rose about 0.6% to above 65.5 US cents.
- US equities rallied (Nasdaq +1.7%, S&P +1%) and gold dropped over 2.6%, signalling a clear risk-on shift.
Three Forces Behind The Aussie Rally
- Ray Attrill highlights three drivers: US–China détente hopes, a stronger PBoC RMB fixing, and RBA commentary.
- The PBoC set the RMB fixing at its strongest since October last year, boosting the AUD via RMB–AUD beta effects.
RBA Caution Eased November Hike Odds
- Michelle Bullock's cautious, data-dependent remarks reduced market odds of a November RBA hike from ~64% to ~57–58%.
- She emphasised humility, scenario analysis, and needing more data, which trimmed near-term rate-hike pricing.