The USD strengthened against all G10 currencies on Friday night, pushing the AUD to a new post-March low of 0.8921, and it has opened up just above that at 0.8935 this morning. The AUD was not helped by a further 1.6% fall in iron ore, which is now at a new post-2009 low of $81.70.

The EUR also lost significant ground, down 0.7% to 1.2832, while even the GBP gave back all of its immediate post Scottish referendum outcome gains. The GBP had strengthened to as high as 1.6525 on Friday afternoon as the referendum results came through (with the No vote winning 55% of the vote) but by Friday night it had fallen as low as 1.6285, and has opened just above that level this morning.

The NZD has opened slightly higher this morning at 0.8150 on a mild relief rally after the National government was returned to power in Saturday’s General Election. The National party secured 48% of the vote and 61 of the 121 seats in the NZ Parliament.

Equity markets on Friday night were mixed. The Dow closed up 0.1%, the S&P down 0.05% and the Nasdaq down 0.3%. Most notable in Europe was the 0.3% gain in the FTSE, sent higher after the failed independence referendum in Scotland.

Australian auction results showed clearance rates a bit lower on the weekend but still at a high level (76.9% in Sydney from 78.3% last week, and 69.3% in Melbourne from 70.5%) while RP Data’s home value index also saw a small decline of 0.1% in the past week. Sydney prices down 0.2% (but up 0.2% over the past 4 weeks) while Melbourne prices were down 0.1% last week and down 2.4% over the past month.

The G20 Finance Ministers and Central Bank Governors meeting in Cairns provided a few highlights. Ministers have agreed on a set of measures that will lift the collective G20 growth by an additional 1.8% over the next four years, and there was some progress on encouraging free trade, infrastructure initiatives and also on improving global tax rules and closing loopholes for tax evasion.

Coming Up

A light data week ahead in Australia with only second-tier data and a couple of RBA events. On the data front, August skilled vacancies are released on Wednesday and Q3 job vacancies on Thursday. Also on Wednesday the RBA releases its biannual Financial Stability Review where most interest will be in the commentary on the housing market. On Thursday, RBA Governor Glenn Stevens is a panel participant at the Melbourne Economic Forum.

In China, the key release is Tuesday’s preliminary reading for the HSBC manufacturing PMI for September, while in the US the highlights are GDP, durable goods and home sales data. NZ trade data are due on Wednesday.

Key data in Europe this week will be the September advance manufacturing and services PMI data tomorrow and the German IFO on Wednesday.

Tonight, the main highlights are US existing home sales for August (market expects a 1% gain) and ECB President Draghi’s speech to the EU Parliament, where he will no doubt be asked about the low uptake of the TLTRO programme last week.

Overnight

Equity markets: Dow Jones Industrials +14 points to 17,280, +0.1%, S&P 500 -0.0%, Nasdaq -0.3%. Eurostoxx 600 +0.2%, FTSE +0.3%, Dax +0.0%, CAC -0.1%. Nikkei 225 +1.6%, Shanghai +0.6% and ASX 200 +0.3%. ASX SPI futures this morning -0.3%.

US bond yields: 2s at 0.56% (0), 10s at 2.57% (-4). WTI oil at $92.41 (-0.7%), Gold at $1215.50/oz (-0.8%). Base metals: LME copper -0.1%, nickel -0.7%, aluminium -0.3%. Iron ore $81.7/t, -1.6%. Soft commodities spot futures: wheat -2.9%, sugar -2.1%, cotton -1.4%. The AUD/USD is at 0.8935 after an overnight range of 0.8921-0.8995.

Canadian headline CPI was as expected (0.0%m/m for 2.1% y/y) but core was 0.5%, above the 0.2% expected, pushing y/y up to 2.1% from 1.7%.

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