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For the 24 hours to 23:00 GMT, the AUD rose 0.28% against the USD and closed at 0.7074.

LME Copper prices declined 0.2% or $13.5/MT to $6169.0/MT. Aluminium prices declined 3.1% or $66.5/MT to $2073.5/MT.

In the Asian session, at GMT0300, the pair is trading at 0.7086, with the AUD trading 0.17% higher against the USD from yesterday's close.

Overnight data revealed that Australia's NAB business confidence index climbed to a level of 6.0 in September, compared to a level of 4.0 in the prior month. Meanwhile, the nation's business conditions index remained unchanged at 15.0 in September.

The pair is expected to find support at 0.7054, and a fall through could take it to the next support level of 0.7023. The pair is expected to find its first resistance at 0.7104, and a rise through could take it to the next resistance level of 0.7123.

Looking forward, investors would keep an eye on Australia's Westpac consumer confidence index for October, set to release overnight.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, Gold declined 0.78% against the USD and closed at USD1191.60 per ounce, as strength in the US dollar, lowered demand for the safe haven asset.

In the Asian session, at GMT0300, the pair is trading at 1193.40, with gold trading 0.15% higher against the USD from yesterday’s close.

The pair is expected to find support at 1185.87, and a fall through could take it to the next support level of 1178.33. The pair is expected to find its first resistance at 1201.07, and a rise through could take it to the next resistance level of 1208.73.

The yellow metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Silver declined 0.96% against the USD and closed at USD14.39 per ounce, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 14.42, with silver trading 0.21% higher against the USD from yesterday’s close.

The pair is expected to find support at 14.29, and a fall through could take it to the next support level of 14.17. The pair is expected to find its first resistance at 14.54, and a rise through could take it to the next resistance level of 14.66.

The white metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Crude Oil rose 0.64% against the USD and closed at USD74.23 per barrel.

In the Asian session, at GMT0300, the pair is trading at 74.56, with oil trading 0.44% higher against the USD from yesterday's close, amid signs that crude exports from Iran are decreasing, ahead of the re-imposition of US sanctions and as a hurricane moved across the Gulf of Mexico.

The pair is expected to find support at 73.55, and a fall through could take it to the next support level of 72.53. The pair is expected to find its first resistance at 75.09, and a rise through could take it to the next resistance level of 75.63.

Crude oil is trading above its 20 Hr and 50 Hr moving averages.

Daily Pivots: (S1) 0.7053; (P) 0.7068; (R1) 0.7093; More...

A temporary low should be in place at 0.7040 in AUD/USD with today's recovery. Intraday bias is turned neutral for consolidation first. Stronger recovery could be seen to 4 hour 55 EMA (now at 0.7136). But upside should be limited well below 0.7314 resistance to bring fall resumption. Break of 0.7040 will resume whole down trend from 0.8135 to 61.8% projection of 0.7676 to 0.7084 from 0.7314 at 0.6948 next.

In the bigger picture, fall from 0.8135 is tentatively treated as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 will target 0.6008 key support next (2008 low). However, break of 0.7500 support turned resistance will argue that the corrective pattern from 0.6826 is going to extend with another rising leg before completion.

The financial markets are mixed in Asia today as risk aversion seemed to have peaked for now. NASDAQ led US stocks decline overnight a hit as low as 7654.84 but closed down only -0.67% at 7735.95. S&P 500 also dipped to 2862.08 but closed down -0.04% at 2884.43. DOW even reversed earlier loss to close up 0.15% at 39.73. In Asia, China Shanghai SSE is up 0.49%, paring some of yesterday's -3.7% loss. Hong Kong HSI is up 0.42%. Nikkei and Singapore Strait Times, however, are down -1.31% and -0.40% respectively.

In the currency markets, Australian Dollar is trading as the strongest one for today so far, as lifted by stabilizing Chinese stocks, as well as improvement in business confidence. Yen follows as the second strongest, which could in that risk aversion is ready to come back any time. Dollar is trading as the weakest one, as yesterday's rally attempt failed. Swiss Franc follows as the second weakest, then Canadian.

Technically, a main focus is whether USD/JPY could draw support from 112.94. fibonacci level for rebound, or it will dip lower in sync with other yen crosses. Also, there are signs that Dollar has made temporary tops, against Euro, Aussie and Canadian. We could see some corrective trading in Dollar in near term as it digests last week's gains.

Australian business confidence rose, ongoing strength but meek price pressures

Australian NAB Business Confidence rose to 6 in September, up from 5 and beat expectation of 5. Business Conditions rose to 15, up from 14 and beat expectation of 9.

Alan Oster, NAB Group Chief Economist noted in the release that "business conditions appear to have stabilized after declining through the middle of 2018." Also, "despite having eased notably from the highs earlier in the year, they remain well above average, suggesting that the business environment continues to be favorable". And, "ongoing strength in employment is especially encouraging."

The only concern remains around "lower forward orders". Mining again is strongest but "retail is weak and deteriorating". And, "retail has now lagged for some time and is unlikely to turn around anytime soon with the weaker outlook for the consumer and ongoing structural changes in the sector". Overall, the survey points to "ongoing strength in business activity" in to latter part of 2018, but "ongoing meek price pressures".

IMF downgrades global growth forecasts as risks materialized

IMF downgraded global growth forecasts for both 2018 and 2019 as some downside risks identified earlier in April have been realized and "the likelihood of further negative shocks to our growth forecast has risen." The risks included "rising trade barriers and a reversal of capital flows to emerging market economies". Financial market conditions could "tighten rapidly" if trade tensions and policy uncertainty were to intensify. And, unexpectedly high inflation readings in the US could "lead investors to abruptly reassess risks"

In several key economies, "growth is being supported by policies that seem unsustainable over the long term." IMF warned that "these concerns raise the urgency for policymakers to act." For the US, IMF said "growth will decline once parts of its fiscal stimulus go into reverse." Also, US forecasts were downgraded "owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation", At the same time, China's 2019 forecasts was also marked down. IMF also warned that "domestic Chinese policies are likely to prevent an even larger growth decline than the one we project, but at the cost of prolonging internal financial imbalances."

• Global growth projected at 3.7% (3.9% prior) in 2018, 3.7% (3.9% prior) in 2019.
• US growth projected at 2.9% (2.9% prior) in 2018, 2.5% (2.7% prior) in 2019.
• Eurozone growth projected at 2.0% (2.4% prior) in 2018, 1.9% (2.0% prior) in 2019.
• Germany growth projected at 1.9% (2.5% prior) in 2018, 1.9% (2.0% prior) in 2019.
• Japan growth projected at 1.1% (1.2% prior) in 2018, 0.9% (2.9% prior) in 2019.
• UK growth projected at 1.4% (1.6% prior) in 2018, 1.4% (1.5% prior) in 2019.
• China growth projected at 6.6% (6.6% prior) in 2018, 6.2% (6.4% prior) in 2019.

Elsewhere

UK BRC retail sales monitor dropped -0.2% yoy in September versus expectation of 0.1% yoy. Japan current account surplus narrowed to JPY 1.43T in August versus expectation of JPY 1.52T. Germany will release trade balance in European session. Canada will release housing starts. Overall, the economic calendar is pretty light today.

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7053; (P) 0.7068; (R1) 0.7093; More...

A temporary low should be in place at 0.7040 in AUD/USD with today's recovery. Intraday bias is turned neutral for consolidation first. Stronger recovery could be seen to 4 hour 55 EMA (now at 0.7136). But upside should be limited well below 0.7314 resistance to bring fall resumption. Break of 0.7040 will resume whole down trend from 0.8135 to 61.8% projection of 0.7676 to 0.7084 from 0.7314 at 0.6948 next.

In the bigger picture, fall from 0.8135 is tentatively treated as resuming long term down trend from 1.1079 (2011 high). Decisive break of 0.6826 will target 0.6008 key support next (2008 low). However, break of 0.7500 support turned resistance will argue that the corrective pattern from 0.6826 is going to extend with another rising leg before completion.

Economic Indicators Update

IMF downgraded global growth forecasts for both 2018 and 2019 as some downside risks identified earlier in April have been realized and "the likelihood of further negative shocks to our growth forecast has risen." The risks included "rising trade barriers and a reversal of capital flows to emerging market economies". Financial market conditions could "tighten rapidly" if trade tensions and policy uncertainty were to intensify. And, unexpectedly high inflation readings in the US could "lead investors to abruptly reassess risks"

In several key economies, "growth is being supported by policies that seem unsustainable over the long term." IMF warned that "these concerns raise the urgency for policymakers to act." For the US, IMF said "growth will decline once parts of its fiscal stimulus go into reverse." Also, US forecasts were downgraded "owing to the recently enacted tariffs on a wide range of imports from China and China's retaliation", At the same time, China's 2019 forecasts was also marked down. IMF also warned that "domestic Chinese policies are likely to prevent an even larger growth decline than the one we project, but at the cost of prolonging internal financial imbalances."

• Global growth projected at 3.7% (3.9% prior) in 2018, 3.7% (3.9% prior) in 2019.
• US growth projected at 2.9% (2.9% prior) in 2018, 2.5% (2.7% prior) in 2019.
• Eurozone growth projected at 2.0% (2.4% prior) in 2018, 1.9% (2.0% prior) in 2019.
• Germany growth projected at 1.9% (2.5% prior) in 2018, 1.9% (2.0% prior) in 2019.
• Japan growth projected at 1.1% (1.2% prior) in 2018, 0.9% (2.9% prior) in 2019.
• UK growth projected at 1.4% (1.6% prior) in 2018, 1.4% (1.5% prior) in 2019.
• China growth projected at 6.6% (6.6% prior) in 2018, 6.2% (6.4% prior) in 2019.

Current forecasts in October.

Prior forecasts in April.

IMF Blog post: Global Growth Plateaus as Economic Risks Materialize

Full World Economic Outlook, October 2018

AUDUSD faces price recovery risk as it looks to follow through higher on the back of Monday higher close. Support comes in at the 0.7000 level where a breach will aim at the 0.6950 level. Below that level will set the stage for a move towards the 0.6900 level. A cut through here should target further downside pressure towards the 0.6850 level. On the upside, resistance lies at the 1.7100 level. A cut through here will turn attention to the 0.7150 level. And then the 0.7200 level where a violation will set the stage for a retarget of the 0.7250 level. On the whole, AUDUSD faces further recovery threats in the days ahead.

STOCKS

Dow (26486.78, +0.15%) has important support just above 26000. While that holds, a bounce back towards 26750 or higher is possible in the medium to long term. But in case the index fails to bounce back from 26000 levels, it could become vulnerable to a fall towards 25500-25300 region.

Dax (11947.16, -1.36%) has fallen below 12000 and is now headed towards lower support at 11900 on the 3-day candles. Weekly charts show lower possibilities of testing 11600. Dax looks bearish just now and could fall to 11900-11600 levels in the near term. We may expect some bounce from weekly support near 11600.

Nikkei (23564.91, -0.92%) is back into the 24000-22800 channel and looks bearish towards 23200-23000 in the near term.

Shanghai (2718.82, +0.085%) is trading lower. If it breaks below 2700, it could head towards 2650-2600 again in the near term.

Nifty (10348.05, +0.31%) fell in line with our expectation. Crucial support is visible near 10000-9800 region which is likely to be tested before the index attempts to bounce back in the longer term. There could be some interim corrective up moves but while below 10500, scope of testing 10000 on the downside remains open.

COMMODITIES

Supports near crude prices mentioned yesterday is holding well. Both Brent (84.10) and WTI (74.51) have bounced back as expected. While these support levels hold, Crude prices could see one last leg of a rally in the near term before entering into a medium term correction.

Brent, while above 82, can see a rise back towards 86-90 in the near term. 80-82 is an important support region to keep an eye on. WTI is also looking bullish towards 78-80 for the near term.

Gold (1193.60) fell sharply to re-test immediate support at 1190. Note that the narrowing range of 1210-1190 could last for another 4-5 sessions before a sharp break on either side. An expected rise above 1210 could take it higher towards 1240-1260 in the longer term while a break below 1190 if seen and sustains could take the price towards 1150 this time.

Copper (2.7855) is likely to hold above 2.70 just now and could trade in the 2.70-2.85 region in the near term. While support at 2.70 holds, Copper could eventually break above 2.85 in the longer run.

FOREX

Watch resistance near 6.935 on Dollar Yuan. Dollar Rupee has immediate support @ 74.0-73.8.

Dollar Index (95.75) : A rise towards crucial resistance near 96.5 in this week / by next week is quite likely. If 96.5 is also broken, then channel resistance near 98 on daily line chart could be the next upside target for the Dollar Index.

Euro (1.1489) has paused for a bit at support near 1.1475 on daily candles. We prefer a break below this support to target lower support near 1.14 in the near term. The next crucial level is the 200 weeks MA @ 1.132. Note that if Dollar index rises to 98, then Euro could correspondingly target 1.12.

Dollar Yen (113.11) : On a decisive break below 113, Dollar Yen could move down to trendline support at 112.0-111.5 by next week. This is the more crucial support, which if broken, could confirm that Dollar Yen has topped out near 114.5.

Euro-Yen (129.97) might have some support near 129.14, provided by the 21 weeks MA. If it breaks below that, there would be good chances of a fall to 127 in the next couple of weeks.

Pound (1.3092) has immediate resistance near 1.3150 and immediate support at 1.30. Preference is for a break of 1.30, leading to a fall to 1.28 (lower support) in the next couple of weeks.

Aussie (0.7083) : While below 0.71, chances of a fall to 0.70 in this week still remain open. Above 0.71, there is resistance near 0.715-0.720 which could keep the upside capped in the near term.

Dollar Yuan (6.9288): There could be some resistance near previous high of 6.935. Keep a watch on this level.

Dollar Rupee (74.065): Immediate support has now moved higher to 74. Next support is at 73.80. While above 73.80, a rise towards resistance at 74.50-60 could happen.

INTEREST RATES

India 10 year yield (7.97%) has broken below the important 8% support and could now move to lower support at 7.90%.

Repeating yesterday's comments: Last week, data on US NFP and average hourly wages both showed lesser growth as compared to the previous month . However, against expectations, the US unemployment rate fell to a 48 years low of 3.7% - this figure might have kept US yields elevated.

The US 10 Year (3.24%) and 30 year (3.43%) have important resistances in the 3.25%-3.30% and 3.40%-3.45% regions respectively, which could make these yields come off in the near term.

The 10 Year German-US spread (-2.71%) is likely to move down towards -2.80% over the next few weeks.

German 10 year yield (0.53%): Resistance on medium term chart near 0.57%-0.60% has held and the yield could dip further towards 0.40% from here.

Japan 10 year yield (0.16%) rose above 0.14% last week and could now target levels near 0.20%-0.25% in the next 2-3 weeks.

Australian NAB Business Confidence rose to 6 in September, up from 5 and beat expectation of 5. Business Conditions rose to 15, up from 14 and beat expectation of 9.

Alan Oster, NAB Group Chief Economist noted in the release that "business conditions appear to have stabilized after declining through the middle of 2018." Also, "despite having eased notably from the highs earlier in the year, they remain well above average, suggesting that the business environment continues to be favorable". And, "ongoing strength in employment is especially encouraging."

The only concern remains around "lower forward orders". Mining again is strongest but "retail is weak and deteriorating". And, "retail has now lagged for some time and is unlikely to turn around anytime soon with the weaker outlook for the consumer and ongoing structural changes in the sector". Overall, the survey points to "ongoing strength in business activity" in to latter part of 2018, but "ongoing meek price pressures".

Full release here.