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The Reserve Bank of Australia bought $3.2billion Aussie  in October versus $ 407million in September (which was the first month of net buying since Sept. 2001). This marks the largest net month of buying intervention on record for Australia.

RBA Governor Stevens: Chinese economic slowdown may be worse than expected, Australia has ample scope to ease rates, central banks must be prepared to take action

Prior Reading at -0.1%

Actual at -1.0%

Combined reading of 9 economic indicators related to consumer confidence, housing, stock prices, money supply, and interest rate spreads.

The following are the highlights from the Australian November Monetary Policy Meeting Minutes:

• Balanced inflation risk with threat of weakening demand.
• Inflation rate will soon start to fall.
• Few precedents for fall in household wealth.
• Large increase in Australian margin loan calls.
• Risks to its GDP forecast are on the downside.
• Business borrowing has leveled out.
• Government spending to boost December and March's quarterly GDP.
• Business expansion being scaled back.
• Global turmoil to hit consumer and business confidence.
• Terms of trade to fall noticeably.
• Falling of Australian Dollar may delay easing in inflation.
• Sizeable cut to November cash rate was appropriate.

The Australian Retail Sales for the 3rd quarter excluding inflation came in worse than expected at 0.1% vs. the 0.4% estimate. The Aussie after gapping lower on the open, has had a minor negative reaction to this release.

The 3rd quarter Aussie Wage Cost Index came in higher than expected, the AUD is little changed after the following release:

Wage Cost Index (QoQ) - Survey:1.0%    Actual:0.9%

Wage Cost Index (YoY) - Survey:4.2%    Actual:4.1%

The Australian Westpac Consumer Confidence survey was down 11% for October, came in better for November up +4.3%. The AUD/USD is little changed after this positive report.

The following are the highlights of the RBA's Quarterly Statement:

• Risk that weaker domestic activity could be deeper and longer than expected.
• Cuts 2008-2009 GDP forecast to 1.5% from 2.25%, non-farm to 1% from 1.75%.
• Cuts 2009-2010 GDP to 2% from 2.5%.
• 2008-2009 CPI forecast at 3% from 3.75%, core inflation at 4% from 3.75%, core inflation at 4% from 3.75%. Stating a lower Aussie to work against inflation decline.
• Projects core inflation at 3% by end of 2010.
• Says policy will balance undue demand drop with the fall in inflation.
• Says economic decline is only moderated, not negated by fiscal stimulus.
• Domestic spending to remain below trend for some time.
• Sees modest growth in household spending over next year, but lower business sentiment.
• Reduced resource-sector spending to flow through to other sectors.
• Jobless rate to rise, employment flattening in 2009, labor demand to ease significantly over next 2 years.
• Terms of trade likely to have peaked.

The following are September Australian data releases:

Home Loans - Survey:-2.8%   Actual:-2.7%

Investment Lending - Survey:-3.0%   Actual:-1.1%

The Australian AIG Performance of Construction came in stronger than last months reading at 36.4 for October, above September's reading of 31.8.