Compass Global Markets' Blog

Market Update - 22nd September 2016 - AUD/USD Rebounds As Fed Continues Wait and See Approach To Rates

Posted by Patrick Downes on September 22, 2016 at 8:27 AM

Stocks, commodities and the Aussie dollar rebounded this morning thanks to the U.S Federal Reserve, who decided at 4.00am AEST to again leave rates unchanged at 0.5%. The news was sort of expected, but a bit of risk aversion had been priced into AUD/USD leading up to the announcement with the obvious risk being a sharp move to the downside if the Fed lifted rates by 25 basis points or more. Fortunately for importers this didn't happen and AUD/USD is now a solid 1% higher than this time yesterday.

Obviously it presents another great opportunity for importers looking to hedge exposures so please do get in touch if you'd like some Forward Contract quotes. 

Ahead today is perhaps a maiden speech from new RBA Gov. Lowe who is due to testify before the House of Representatives in Canberra this morning. No doubt he'll be grilled on the economy and his monetary policy plans.

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Market Update - 21st September 2016 - BOJ, RBNZ and U.S Fed All With Interest Rate Decisions Over Next 24Hours

Posted by Patrick Downes on September 21, 2016 at 9:19 AM

Three interest rate decisions over the next 24 hours could shape the Aussie's movement over the next month or so, with Japan, the U.S and New Zealand all deciding on where if at all the next interest rate move will be. Expectations are that Japan will move rates further negative today, which could provide a boost in AUD/JPY, while in the U.S early tomorrow morning bets are down to a 20% likelihood that we'll see a rate hike from Janet Yellen's Federal Reserve. RBNZ are not expected to move.

The Aussie dollar has continued on it's little run higher against the majors ahead of the Fed interest rate decision and it sort of feels like we could expect more of the same today and tomorrow. But, feeling something is different to knowing something and the risk remains that Janet Yellen could surprise the market with a rate hike. If she does, its fair to assume that AUD/USD will drop like a rock, potentially by up to two cents.

Stocks were flat overnight however commodities led by the energy sector moved higher - iron ore remains above government forecasts at US$55 a tonne.

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19th September 2016 - Weekly Currency Market Report.

Posted by Thomas Su on September 20, 2016 at 10:34 AM

 

The Market in Brief:

                              • AUD down against USD, JPY and CHF
                              • AUD up against GBP, CAD and flat V EUR and NZD
                              • CNY Industrial Production at 6.3% V expected 6.2%.
                              • AUD Unemployment -3,900 but unemployment drops to 5.6%
                              • GBP down on talk of Article 50 being triggered re BREXIT in Feb 2017
                              • USD up after CPI increased 1.1% over the past 12 months

Market Events Due:

                            • AUD RBA Sept Meeting Minutes (Tue) and new RBA Governor Lowe speaks (Thur)
                            • JPY BOJ Monetary Policy Statement and Governor Kuroda speak
                            • EUR ECB President Draghi speaks
                            • GBP BOE Governor carny speaks
                            • USD Building Permits (Tue) FOMC Statement and Fed funds rate, Yellen speaks, Unemployment claims (Thur)
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Market Update - 20th September 2016 - Aussie Edges Higher On Positive Global Sentiment

Posted by Patrick Downes on September 20, 2016 at 8:30 AM

The so called Aussie has pushed marginally higher against all the crosses overnight thanks to a little uptick in positive global sentiment which has seen equities and commodities including iron ore edge higher over the past 24 hours. Monetary policy minutes from the latest RBA meeting is due at 11.30am and will as per usual be watched closely for an indication on where the economy and rates are headed.

Building permits out of the U.S are due later this evening and while it's not typically associated with big moves in AUD/USD it'll hold more clout given the upcoming U.S Fed Interest Rate decision due Thursday morning. Economists are expecting U.S building permits to edge higher with 1.17M new permits annualised, which would equate to 6 revisions higher in the past 6 months - not bad growth at all considering we're about 10 years since the GFC.

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Market Update - 19th September 2016 - AUD Hinges On U.S Fed Interest Rate Decision Thursday

Posted by Patrick Downes on September 19, 2016 at 9:22 AM

No economic data is due out today, however as the week goes its pretty jam packed with news and announcements. Kicking off the announcements tomorrow is monetary policy minutes from the latest RBA meeting in which Glenn Stevens in his last meeting decided to leave rates on hold at 1.5%. While it's typically a lagging indicator looking back in time it still serves as a strong impetus to the Aussies movements as such a more bullish or bearish tone could have impacts.

Looking further out and perhaps the most crucial announcement of the week and this month is the U.S Federal Reserve's latest interest rate decision due Thursday morning. This one has been talked about endlessly over the past month and it still remains to be seen if Janet Yellen and the U.S Fed will pull the trigger on a second rate hike - the first being in December last year. If they do, you'd best be prepared for a sudden and dramatic drop in AUD/USD and the other AUD crosses. If they don't its probably business as usual and the Aussie will keep treading water.

Anyway I'll let you mull on that, if you need a quote or have a friend or colleague who is in the business of importing or exporting, please don't hesitate to put me in contact with them. Certainly always looking for new business and always looking to help individuals and businesses who are getting a poor deal from their bank.

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15th September 2016: ABS Unemployment Figures

Posted by Thomas Su on September 15, 2016 at 12:00 PM

Media Release: Increasing Part-time employment increases.

Monthly trend employment in Australia increased in August 2016, according to figures released by the Australian Bureau of Statistics (ABS) today.

In August 2016, trend employment increased by 9,900 persons to 11,965,100 persons - a monthly growth rate of 0.1 per cent. Trend part-time employment growth continued, with an increase of 10,200 persons, while full-time employment decreased by 400 persons.

”The latest Labour Force release shows continued strength in part-time employment growth, with the majority coming from increasing male part-time employment. Since December 2015, there are now around 105,300 more persons working part-time, compared with a 21,500 decrease in those working full-time,” said the Program Manager of ABS' Labour and Income Branch, Jacqui Jones.

The trend monthly hours worked increased by 1.7 million hours (0.1 per cent), although it remained below the high in December 2015, reflecting the shift in full-time and part-time employment.

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Market Update - 15th September 2016 - Aussie Stable Ahead of Employment Data At 11.30am

Posted by Patrick Downes on September 15, 2016 at 8:38 AM

Good morning all. U.S and European equities fell only marginally last night while commodity prices were mostly stable with iron ore and oil remaining around levels we've seen the past few days. The Aussie dollar not surprisingly (given it's strong connection with iron ore and global sentiment) was also fairly stable managing to hold about 0.7450 vs. the Greenback and 0.6640 vs. the Euro despite some pretty strong bearish sentiment of late.

Local Aussie employment data is due this morning at 11.30am which will provide another catalyst for a move for the local currency with predictions pointing towards no change in the unemployment rate despite an additional 15K individuals finding employment.

The data keeps coming tonight, with U.K Interest Rates at 9.00pm along with U.S Retail Sales and manufacturing numbers at 10.30pm.

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Market Update - 14th September 2016 - Risk Aversion Sees Aussie Continue 6 Day Slide

Posted by Patrick Downes on September 14, 2016 at 9:24 AM

U.S and European equities fell overnight along with the Aussie dollar which resumed 6 days of losses that have seen AUD/USD fall by just over 300 points or in percentage terms around 4%. The falls coincide with renewed risk aversion across global markets stemming from concerns that the U.S Federal Reserve may start to tighten monetary policy again by raising the official U.S benchmark rate to 0.75% from 0.5%. Obviously an increase in U.S interest rates means worries for U.S equities (which in turn hurts global equities) and more demand for U.S Dollars thanks to an increase in the yield of the currency.

On a brighter note, Chinese data released yesterday showed their economy is stabilising across a number of areas with industrial production and retail sales appearing to trend or remain steady over the past year or so instead of declining. Ahead this evening is U.K employment numbers at 6.30pm.

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Market Update - 13th September 2016 - Aussie Claws Back Some Lost Ground & Chinese Data Due At Midday

Posted by Patrick Downes on September 13, 2016 at 9:54 AM

The Aussie dollar clawed back some lost ground over the past 24 hours managing to at least finish marginally ahead of where we were this time yesterday. AUD/USD is up around 25 basis points to 0.7560, while AUD/EUR is up a similar amount at 0.6729. Chinese industrial production is due at midday, with the figure tipped to rise ever so slightly to 6.2% from 6.00%. Looking at Chinese industrial production from a more macro stand point it would appear they've found a new normal rate of growth around that 6% mark where its been now for around two years.

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12th September 2016 - Weekly Currency Market Report.

Posted by Thomas Su on September 12, 2016 at 1:53 PM

 

The Market in Brief:

                            • AUD down against the majors
                            • JPY the best performing currency of the week
                            • AUD GDP slightly lower than expected (0.5% V expected 0.6%) whilst trade balance better than expected (-2.41bn V expected -2.65bn)
                            • AUD RBA leaves rates on hold at 1.5% as expected
                            UK data mixed

Market Events Due:

                          • CNY Industrial Production (Tue)
                          • GBP CPI (Tue) Average Earnings Index (1/4) Claimant Count Change (Wed)  Official Bank Rate and Monetary Policy Statement (Thur)
                          • AUD Employment Change and Unemployment Rate (Thur)
                          USD Core Retail Sales, PMI, Philly Fed Manufacturing Index and Unemployment Claims (Thur) Core CPI and Prelim UoM Consumer Sent. (Fri)
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