Compass Global Markets' Blog

Market Update - 20th January 2017 - USD & Equities Remain Out of Favour, While Aussie Surges

Posted by Patrick Downes on January 20, 2017 at 8:47 AM

Apologies about no reports this week, I've been battling with a nasty cold and lost phone which has really put me behind the 8-ball this week.

Equity markets and the US Dollar continue to remain out of favour as we get closer and closer to Saturday morning's inauguration. Global equities fell by as much as half a percent while the Greenback continued a decline which began early January. The good news for importers however is that the Aussie dollar just continues to push higher despite even poor local employment data yesterday which saw the unemployment rate unexpectedly climb to 5.8% (clearly not a positive for the local economy).

Chinese GDP data is due out today followed by UK retail sales and of course the much anticipated (for all the wrong reasons) Trump inauguration, which will take place early Saturday morning for those of you interested. There's expected to be some pretty serious fireworks both on the ground and on markets with his supporters likely to clash against those protesting against his inauguration. Additionally markets will likely start to move quite dramatically once he starts speaking.

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Market Update - 19th January 2017 - Markets Volatile Leading Up To Trump Inauguration

Posted by Patrick Downes on January 19, 2017 at 8:34 AM

Apologies about no reports this week, I've been battling with a nasty cold and lost phone which has really put me behind the 8-ball this week.

Equity markets and commodities have tracked a volatile yet predictable course leading up to the inauguration of Donald Trump on Saturday morning AEST with the Dow Jones Industrial failing to break 20,000 despite getting very close on a number of occasions, while commodities such as oil and iron ore have sea-sawed back and forth.

The Aussie dollar has however bucked the trend managing to add gains consistently day in day out through January. In fact since early Jan we have rallied some 4-5% vs not only the Greenback but also vs. the Euro and GBP marking one of the best January's for the Aussie dollar since 2012. With AUD now near 2-3 month highs vs. a lot of the majors and with the inevitable volatility surrounding Trump's inauguration Saturday morning I'd suggest clients who are looking to hedge do so now, but perhaps only a portion of your hedging as we're really in quite uncharted/unpredictable waters with respect to the likely direction of the Aussie dollar throughout 2017.

Aussie employment numbers are the big local data announcement today with the latest employment figures due around 11.30am. U.S economic data and the latest monetary policy/interest rate decision is due from the ECB later this evening.

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Market Update - 13th January 2017 - AUD/USD Touches 0.7500 Ahead Of U.S Economic Data

Posted by Patrick Downes on January 13, 2017 at 8:37 AM

Equities dipped overnight, but not before another solid day locally for both equities and the Aussie dollar which saw AUD/USD touch briefly above 0.7500 on the wholesale market. AUD/USD has since come off those highs but still presents reasonably attractive levels to buy USD, EUR and GBP. No data was released overnight however a speech from Fed Chair Janet Yellen this morning followed by a raft of U.S economic data later tonight certainly sets us up for a more volatile evening of trade to cap off a quite week.

In other news, U.K Prime Minister Theresa May is due to speak next Tuesday and is likely to spell out in detail the steps for Brexit to occur over the next year or so - not surprisingly this will probably be marked by quite a bit of movement on markets and more specifically on U.K equities and AUD/GBP.

For those of you starting back this week, I hope you had a pleasant start to the New working Year and again wish you all the best in 2017.

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Market Update - 12th January 2017 - AUD Surges Again On Positive Global Risk Sentiment

Posted by Patrick Downes on January 12, 2017 at 8:26 AM

Risk appetite shifted up a gear overnight with equities, commodities and the Aussie dollar the biggest gainers from a very positive start to 2017. AUD/USD added another 1.1%, while AUD/EUR and AUD/GBP added around 0.8% taking total gains for AUD/USD since the start of Jan to nearly three whole cents, while AUD/EUR and AUD/GBP are up two and three full cents respectively in 2017. As we head closer and closer towards one month highs I'd certainly think it prudent for importers to look at making payments and therefore taking advantage current exchange rates.

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Market Update - 11th January 2017 - Poor Local CPI Does Little To Fade Aussies Shine

Posted by Patrick Downes on January 11, 2017 at 8:26 AM

Poorer than anticipated Chinese CPI & local retails sales did little to ruin the AUD party with the Aussie barely faltering despite the less than enthusiastic data. In fact the AUD gained ground thanks to higher commodity prices and as the inauguration of President-elect Donald Trump nears. Trump will become the 45th U.S President on the 20th of January and is being touted as an infrastructure President who will boost infrastructure spending which in turn is tipped to aid the Australian economy and more specifically Aussie mining companies - hence the AUD rally. However as with anything we cannot predict the future and only time will tell whether Trump can/or even will follow through on his infrastructure promises. But certainly he has some big name hedge managers like Stan Druckenmiller and Carl Icahn who are 'quite, quite optimistic' about a Donald Trump presidency.

UK manufacturing production is due this evening but other than that its another thin day of economic announcements.

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Market Update - 10th January 2017 - AUD Surges Nearly 2% Vs. GBP As Brexit Comes Into Focus

Posted by Patrick Downes on January 10, 2017 at 8:32 AM

The Aussie dollar has pulled away again overnight, adding as much as 1.8% vs. the Great British Pound and just over 0.8% vs. the USD. The strong gains on AUD/GBP come amid little data announcements but just following a speech from U.K PM Theresa May who outlined the strategy for Britain's exit from the EU. It's almost of though U.K traders had forgotten that they voted to leave the EU in the middle part of last year.

Local retail sale and Chinese inflation figures are due out later today with the local market expecting to see about 0.4% growth in retail sales for the latest period. Chinese inflation is tipped to come in at 2.2% which would be about on trend for the past 2-3 years.

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Market Update - 9th January 2016 - AUD/USD Succumbs To Profit Taking Despite Weak U.S Jobs Numbers

Posted by Patrick Downes on January 9, 2017 at 8:22 AM

Global equities finished the first full week of 2017 on a positive note with most indices including the ASX200 up modestly. The Aussie dollar in contrast didn't perform quite so well, falling around 0.75% versus the Greenback on Friday evening despite a weaker than anticipated U.S Non-Farm employment number which came in about 20,000 jobs short of expectations. Ordinarily AUD/USD would be expected to rally in the event of weaker U.S jobs numbers however in this case it was perhaps rather traders taking profits on what has been a profitable trade since the beginning of January for those long (buyers of) AUD/USD. AUD/EUR and AUD/GBP remain reasonably strong hovering just under 0.7000 and 0.6000 respectively, so no issues here, just buy at market when payments come up.

The week ahead looks pretty quiet with only building approvals this morning and retail sales at 11:30am tomorrow morning. Retail sales are tipped to come in on trend at around 0.4% but certainly economists and politicians will be hoping for a strong bump in the number. Other data releases include Chinese CPI/inflation figures around midday tomorrow followed by U.S retail sales and PPI on Friday evening.

A lot of you are returning to work today after the long break so I wish you and your respective businesses all the best in 2017 and certainly hope it's your best year yet.

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Market Update - 6th January 2017 - Aussie Bounces Again On Poor Preliminary U.S Jobs Numbers

Posted by Patrick Downes on January 6, 2017 at 8:45 AM

The Aussie dollar has strung together a fourth day of gains bringing AUD/USD up by another 0.8% to be trading around 0.7340 this morning. The gains come amid poor preliminary U.S jobs numbers which came in below expectations at 153,000. The poor showing in this preliminary jobs data means traders will go into tonight's official Non-Farm Payrolls figures expecting a poor number, estimates are for about 175K new jobs to have been created in the latest period.

Other than that, it was a reasonably quiet night for markets with the Dow Jones failing to push past the key 20,000 figure while European equities finished the session flat. The local equity market is tipped to open higher by around 0.2% this morning thanks to continued positive sentiment globally.

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Market Update - 5th January 2017 - AUD/USD Posts Third Day Of Gains Despite Bullish Fed Reserve Minutes

Posted by Patrick Downes on January 5, 2017 at 8:30 AM

The Aussie dollar performed quite well again overnight, adding around 0.8% vs. the Greenback and stringing together a third day of gains. The AUD gains come amidst broad weakness in other currencies including the U.S Dollar and a strong early showing from riskier assets such as commodities and equities which have pushed higher again over the past 24 hours.

AUD/USD's resilience and early gains in 2017 is certainly impressive particularly give that in the latest Federal Reserve FOMC minutes released last night, almost all U.S Federal Reserve members believe “that the upside risks to their forecasts for economic growth had increased as a result of prospects for more expansionary fiscal policies in coming years" and the likelihood that the next rate hike could come as early as June according to some forecasts.

Ahead tonight is UK Services PMI followed by preliminary U.S jobs numbers in the form of ADP Payrolls. This data is due around midnight and precedes the more accurate and closer watched official non-farm employment data released Friday evening. Expectations are for around 170K new jobs to have been created.

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Market Update - 4th January 2017 - Strong Manufacturing Numbers Help Boost Equities & AUD

Posted by Patrick Downes on January 4, 2017 at 9:08 AM

The first morsels of economic data for 2017 started to trickle in overnight with key manufacturing gauges coming out of China, the U.K and U.S. For the most part the data was positive with a bounce in manufacturing across the board. China's Caixin PMI figure, a gauge of purchasing managers, came in at 51.9, the most optimistic Chinese purchasing managers have been in about two and a half years. Similar gains were seen in both the U.S and U.K PMI figures.

U.S and European equities were boosted by the positive economic manufacturing data with U.S equities up by around 0.8%, while European equities gained between 0.2%-0.5%. The Aussie dollar is up marginally to 0.7220 on the wholesale market but may struggle today in light of weaker commodity prices and the strong manufacturing data out of the U.S. AUD/EUR is the stand out performer up a whopping 1.3% overnight.

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