The central bank bonanza continues into the new week with the RBA raising its cash rate by a measly 25 bps today. The decision was much expected but there was certainly a case for the central bank to be more aggressive and considering now that they didn't, it seems like we are starting to head towards the mean reversion of less aggressive rate hikes.
With month-end trading out of the way, we can start to focus on November and put all the attention to the FOMC meeting tomorrow. The dollar was higher yesterday alongside Treasury yields but we are seeing more chop today as they are both lower. Meanwhile, S&P 500 futures are up 14 points, or 0.4%, so far but doesn't take away from yesterday's drop.
As such, there is a sense of indecision and mixed feelings as we settle into the new week/month with the Fed in the crosshairs. The key focus will be on whether or not we will get any clues on a potential Fed pivot in the works. All it would take is just that little bit of hope and one can expect markets to run with that, considering how things have been building up in the past two weeks.
