What Hauser said
Speaking at the Citi conference in Sydney, he directly named the key points: inflation is running slightly above expectations and has remained elevated for a prolonged period, underlying quarterly inflation (trimmed mean - a methodology that strips out the sharpest price rises and falls from the calculation) will most likely exceed the forecast, and production capacity constraints have turned out tighter than assumed. Companies cite rising costs as their main problem. The RBA's target band is 2-3%.
Why the market read this as a hawkish signal
Hauser added that the forecasts are still being finalized and there is no certainty regarding the board's decision. But for the market, the key takeaway was the admission that the inflation picture is deteriorating rather than improving - while the September employment report came in weaker than expected, unemployment remains low, but the labor and housing markets are cooling.
The second half of the move - a weak dollar
The DXY dollar index fell 0.24% to 101.73. The reason - weak US data: the average four-week job growth according to ADP slowed from 26K to 18.5K, and pending home sales for September plunged 7.3% against a forecast of a decline of just 0.5%.
What's next
The pair is trading below the triple moving average cluster around 0.7078 - this is the nearest resistance, above that come 0.7091 and 0.7198. Supports: 0.7010 and 0.6917. RSI (14) is neutral - 50.18. The nearest trigger for Australia is the S&P Global preliminary business activity indices on October 22; for the US, this week brings jobless claims for the week to October 17 and the final Michigan index.
Were you holding AUD/USD during the Asian session?
A move on the words of a central bank official is overnight Moscow time, a thin order book and widened spreads. And this is exactly where prop program conditions diverge the most: at some firms the Australian dollar isn't even on the list of tradable pairs, at others overnight positions are forcibly closed, and the commission on crosses during the Asian session can be twice as high. These points are read before paying for a challenge, not after the first surprise in a report. A filter by instruments and trading conditions weeds out the excess in a minute.