Don't jump the guns with RBA minutes, building permits - AIG index and commodity prices signal AUD’s weakness to prevail

While last week's Aussie CPI data (0.5% VS previous 0.7%) a key signpost for RBA.

Earlier in this cycle, when the automatic stabilizers- particularly AUD-were slow to react to fundamentals, the RBA was able to give these adjustments a kick along with rate cuts.

Although building permits show positive remarks, we don't like to interpret this as a positive booster completely for the currency.

On the flip side, Aussie manufacturing & commodity prices have reported lackluster numbers. The manufacturing industry extended for a 4th consecutive month in October, albeit only marginally.

The diffusion index on Aussie manufacturing performance propagates the survey numbers at 50.2 which is a decrease from previous 52.1, while commodity prices have been plunged from 21% to 19.8%.

These sluggish figures hint slowing growth in coming days which in turn evidences the impetus to the existing weakness in Aussie currency.

This month's result is only very mildly positive, suggesting stability rather than meaningful growth across Australia's manufacturing sectors.

The key elements that cannot be disregarded and jump in to conclusion for AUD's resurgence:

• AUS PMI reduced to 50.2 MoM.
• New orders reduced to 49.9 MoM.
• Sales reduced to 49.0 MoM.
• Employment claims reduced to 49.2 MoM.