Compass Global Markets' Blog

Market Update - 22nd June 2018 - ASX200 Surpasses 2007 High & Bank Of England Inching Towards Rate Hike

Posted by Patrick Downes on June 22, 2018 at 8:54 AM

The Bank of England last night chose to keep interest rates on hold at 0.5%, which was no surprise and inline with predictions. However what's interesting is that in their voting system, which provides insight into who voted for what and why, showed a third member of the seven member board is now interested in a rate hike, one more than had been the case previous. Odds are therefore increasing that we could see a rate hike from the Bank of England sooner rather than later which should continue to support the GBP. AUD/GBP has been tracking lower over the month and is now around two cents off the high we saw in early June around 0.5750.

In other news U.S and European stock markets retreated with commodities. Our Aussie share market has however bucked that trend over the last few days with the ASX200 managing to finally surpass the 2007 high - it only took 11 years. Have a great weekend!

AUD EXCHANGE RATES:

AUD/USD – 0.7374

AUD/GBP – 0.5567

AUD/EUR – 0.6353

AUD/NZD – 1.0736

AUD/JPY – 81.048

USD/BTC – $6,680

OTHER MARKETS: 

All Ords (XAO) – 6,332

Gold – A$1718/oz

Silver –  A$22.15/oz

WTI – US$65.86/barrel

DATA RELEASES TODAY:

All - OPEC Meetings

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Topics: Report, Market

Market Update - 21st June 2018 - AUD/USD Declines Below 0.7400 For First Time Since June 2017

Posted by Patrick Downes on June 21, 2018 at 8:37 AM

As I suspected could be the case in Tuesday's morning report (Market-Update-19th-June-2018) the AUD has most certainly tested the 0.7400 handle breaking below for the first time in 2018, and hitting it's lowest point since June 2 2017. Trade war fears, higher U.S interest rates and general market weakness is the main culprit for the sell off in risk assets: which includes the AUD, Commodities & Equities. The chart of AUD/USD certainly looks ugly since the declines began in Feb, but I suppose the one positive is that commodities have rallied over night and growth in China and India continues unabated. Additionally this time last year when AUD/USD hit 0.7370 we went on a sustained rally to be trading back at 0.8000 by the end of July.

Moral of the story? The Aussie Dollar is notoriously difficult to forecast with any accuracy and your bet about the AUD's next move is probably as good as mine, as such the key thing for both importers and exporters is to always monitor those costing levels and be sure to hedge when the opportunity arises to lock in Forward Contracts and by default your profits.

AUD EXCHANGE RATES:

AUD/USD – 0.7366

AUD/GBP – 0.5589

AUD/EUR – 0.6363

AUD/NZD – 1.0734

AUD/JPY – 81.287

USD/BTC – $6,692

OTHER MARKETS: 

All Ords (XAO) – 6,274

Gold – A$1720/oz

Silver –  A$22.10/oz

WTI – US$65.37/barrel

DATA RELEASES TODAY:

GBP - Bank of England MPC Official Bank Rate Votes at 9.00pm

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Topics: Report, Market

Market Update - 19th June 2018 - Aussie Dollars Decline Accelerates As Markets Remain Jittery

Posted by Patrick Downes on June 19, 2018 at 8:32 AM

The Aussie dollars decline has continued unabated overnight as markets remain jittery following initial jabs in a trade war between China and the U.S and general weakness in commodities prices. AUD/USD looks set to test support at the 0.7400 level, while AUD/EUR which had been as high as 0.6546 is now looking quite weak in the mid to high 0.63's. AUD/GBP is holding just above 0.5600 but may well also succumb to further selling pressure if this mornings monetary policy meeting minutes from the RBA are more bearish that anticipated. Minutes from the last meeting will be released around 11.30am.

U.S and European equities sold off again overnight with European stocks faring the worst, down as much as 1.4% in Germany. Commodities as mentioned above also performed poorly Zinc, Nickel and Copper all lower overnight, oil moved higher marginally.

Data out today includes monetary policy minutes at 11.30am, followed by a speech from ECB President Draghi and U.S Building Permits later tonight. The key data probably being the monetary policy minutes release. The RBA has been generally pretty bearish on their views of the Australian economy and are really struggling to see a reason to raise rates from a stubbornly low 1.5%. The RBA is concerned that higher rates could lead to a swifter decline in property prices so they are preferring to wait until wages growth picks up as that could offset the impact of any further decline in property prices and of course allow indebted property investors the ability to pay off the larger associated mortgage repayments.

AUD EXCHANGE RATES:

AUD/USD – 0.7421

AUD/GBP – 0.5601

AUD/EUR – 0.6375

AUD/NZD – 1.0702

AUD/JPY – 82.051

USD/BTC – $6,697

OTHER MARKETS: 

All Ords (XAO) – 6,212

Gold – A$1723/oz

Silver –  A$22.22/oz

WTI – US$65.67/barrel

DATA RELEASES TODAY:

AUD - Monetary Policy Meeting Minutes from the RBA at 11.30am

EUR - ECB President Draghi Speaks at 6.00pm

USD - Building Permits at 10.30pm

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Topics: Report, Market

Market Update - 18th June 2018 - Trump Escalates Trade War With China, Commodities & AUD Lower As A Result

Posted by Patrick Downes on June 18, 2018 at 8:20 AM

It's a bank holiday in China today, which means all payments received over the weekend bound for China will be released tomorrow. As such please allow an extra day for payments to be received by your suppliers.

Commodities, stocks and the Aussie Dollar all finished the week in the red with Trump escalating an unwinnable trade war with China. Understandable retaliatory tariffs by China on U.S exports to the tune of about $34 billion rattled markets and saw equities in the U.S off by about 0.2%-0.3%, while Europe fared far worse with the FTSE down as much as 1.7%. Commodities markets also got hit which in turn put a substantial dampener on the Aussie dollars recent good form.

AUD/USD is trading in the low 0.74's and may well retrace below this level if Trump continues his current path, while AUD/EUR and AUD/GBP have both lost considerable ground over the weekend and start the week at 0.6417 and 0.5604 respectively.

AUD EXCHANGE RATES:

AUD/USD – 0.7441

AUD/GBP – 0.5605

AUD/EUR – 0.6417

AUD/NZD – 1.0725

AUD/JPY – 82.330

USD/BTC – $6,470

OTHER MARKETS: 

All Ords (XAO) – 6,104

Gold – A$1719/oz

Silver –  A$22.26/oz

WTI – US$64.18/barrel

DATA RELEASES TODAY:

No economic data today + Bank Holiday in China

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Topics: Report, Market

Market Update - 15th June 2018 - U.S Retail Sales Surprise To The Upside, USD Surges Sending AUD/USD Lower

Posted by Patrick Downes on June 15, 2018 at 8:36 AM

U.S retail sales came in far better than expected overnight, doubling estimates at 0.8% and surprising economists and traders alike with figures not seen since December of last year. The very bullish and perhaps surprising retail sales pickup provided a boost for the US Dollar helping the US Dollar Index surge to a 7 month higher following the biggest single day move since November 2016. Unfortunately that also means a quite substantial drop in AUD/USD which had been looking quite healthy in the mid 0.75's but is now back in the lower part of a bi-monthly range in the mid 0.74's.

The U.S Federal Reserve also lifted rates on Thursday morning whilst telegraphing at least two more rate hikes before the end of the year. All of this along with slightly weaker commodities prices has been dragging on the Aussie dollar over the past 24 hours.

For those following AUD/EUR and AUD/GBP: The Aussie dollar has had a good run against both over the past two months, however more recently we've see a reversion to the mean and selling which has brought both AUD/EUR and AUD/GBP off these two month highs. AUD/GBP in the low 0.56's and AUD/EUR in the mid 0.64's remains pretty good levels considering we had got to as low as 0.5412 and 0.6190 for AUD/GBP and AUD/EUR respectively in the past month or so.

AUD EXCHANGE RATES:

AUD/USD – 0.7474

AUD/GBP – 0.5632

AUD/EUR – 0.6455

AUD/NZD – 1.0724

AUD/JPY – 82.702

USD/BTC – $6,618

OTHER MARKETS: 

All Ords (XAO) – 6,129

Gold – A$1742/oz

Silver –  A$22.99/oz

WTI – US$66.81/barrel

DATA RELEASES TODAY:

USD - Prelim UoM Consumer Sentiment at midnight

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Topics: Report, Market

Market Update - 13th June 2018 - AUD Little Changed Over The Month, Equities Lower

Posted by Patrick Downes on June 13, 2018 at 9:32 AM

Queens Birthday Monday and a Pies win in the AFL, makes me a very happy FX Dealer. Also the fact I had an extra long weekend certainly helps add some cheer.

No morning reports from me last week, so apologies about that, but the truth is the Aussie dollar has done bugger all over the past month or so. Earlier this month we hit a high of 0.7677 vs. the Greenback while the recent low was 0.7465 in early May. So between that high and low you're talking about 300 points or a roughly 4% range, minuscule considering AUD/USD has been known in the past to move as much as one or even two percent in a day. AUD/USD has been trending higher during this period but the more long range trend going back to Feb suggests we are still in a cyclical downtrend.

On the markets front, U.S and European equities moved generally lower with the exception being the S&P500 up 0.17% and the NASDAQ which bucked the trend and was up 0.57% at the close. Commodities markets generally moved lower, with Iron ore and Uranium prices dropping the most. Uranium is becoming an important metal to watch with those who have an interest in commodities. Uranium is an obvious source of clean base load power and looks set for a revival thanks to the electric vehicle revolution. Additionally the demand/supply setup looks terrific for a sustained bull run when one starts.

Ahead tonight is the FOMC Statement and Federal Reserve interest rate decision - expectations are that a well choreographed 25 basis point increase to 2.00% is on the cards - as such we're probably not likely to see too much volatility on the part of the rate increase, but more so on the attached rhetoric and commentary on further rate increase - watch this space.

AUD EXCHANGE RATES:

AUD/USD – 0.7569

AUD/GBP – 0.5661

AUD/EUR – 0.6443

AUD/NZD – 1.0810

AUD/JPY – 82.606

USD/BTC – $6,499

OTHER MARKETS: 

All Ords (XAO) – 6,042

Gold – A$1711/oz

Silver –  A$22.26/oz

WTI – US$65.76/barrel

DATA RELEASES TODAY:

AUD - RBA Gov Lowe Speaks at 12.00pm

USD - Fed Funds Rate & FOMC Statement at 4.00am

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Topics: Report, Market

5th June 2018: RBA Announcement Cash Rate unchanged at 1.50 per cent.

Posted by Thomas Su on June 5, 2018 at 2:31 PM

Statement by Philip Lowe, Governor: Monetary Policy Decision

At its meeting today, the Board decided to leave the cash rate unchanged at 1.50 per cent.

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Market Update - 30th May 2018 - Italy Political Woes Drag Down AUD & Equities, While Gold Surges

Posted by Patrick Downes on May 30, 2018 at 8:37 AM

U.S and European stocks got pummelled overnight while Gold surged as Italy's political prospects jolted the markets just when things appeared to be settling down. Specifically fears grew on the "prospect that Italy might need a fresh election that could be a referendum on the nation’s inclusion in the euro zone." Obviously anything relating to Brexit, Grexit or Itexit has in the past jolted markets and caused a surge in volatility and it appears unfinished business has come back to haunt markets once again. On the flip side, the good news is that China continues to expand while U.S earnings seasons has showed strong growth in earnings but with that also growing inflation.

Looking at currencies and we see that the Euro got pummelled on the Italy news which has helped boost AUD/EUR to near 0.6500 or five month highs. Things remain bullish for AUD/EUR and we may yet see further gains here as Italy's political woes pan out over the next few weeks or even months - these things have a habit of dragging on.

U.S preliminary GDP numbers and preliminary employment numbers are out this evening with the market expecting to see about 186K new jobs created and quarterly GDP running at an estimated 2.3%.

AUD EXCHANGE RATES:

AUD/USD – 0.7505

AUD/GBP – 0.5659

AUD/EUR – 0.6499

AUD/NZD – 1.0873

AUD/JPY – 81.489

USD/BTC – $7,419

OTHER MARKETS: 

All Ords (XAO) – 6,121

Gold – A$1731/oz

Silver –  A$21.83/oz

WTI – US$66.97/barrel

DATA RELEASES TODAY:

USD - ADP Non-Farm Employment Change at 10.15pm

USD - Prelim GDP q/q at 10.30pm

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Topics: Report, Market

Market Update - 29th May 2018 - Commodity Prices Remain Subdued, AUD/EUR To Test 0.6500

Posted by Patrick Downes on May 29, 2018 at 9:12 AM

Again there is no economic data out today or this evening which in conjunction with bank holidays in the U.S and U.K overnight means very little movement in currency markets. AUD/USD is continuing to tread water in the 0.7500's, while AUD/EUR is the big mover up again and looking to break through 0.6500 potentially in the next few days. Commodity prices remain subdued and this is dragging on the Aussie dollar which has for the better part of a month traded in a tight range between 0.7410 and 0.7600 vs. the Greenback.

So other than that there is really not too much more to discuss. Have a great day.

AUD EXCHANGE RATES:

AUD/USD – 0.7545

AUD/GBP – 0.5667

AUD/EUR – 0.6488

AUD/NZD – 1.0871

AUD/JPY – 82.585

USD/BTC – $7,098

OTHER MARKETS: 

All Ords (XAO) – 6,113

Gold – A$1719/oz

Silver –  A$21.83/oz

WTI – US$66.61/barrel

DATA RELEASES TODAY:

No economic data today or this evening

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Topics: Report, Market

Market Update - 28th May 2018 - AUD Continues To Hover In The Mid To Low 0.75's

Posted by Patrick Downes on May 28, 2018 at 8:29 AM

An absence of news over the weekend and no economic data sees the Aussie dollar little changed since Friday. AUD/USD remains in the mid 0.75's, while AUD/EUR and AUD/GBP have continued to inch higher. Bitcoin which has lost much of its appeal from last year has also continued to weaken and is threatening to once again dip below US$7000 a coin.

No economic data out today or tomorrow and we have bank holidays in both the U.K and U.S tonight which means payments in USD and GBP will not go out until Tuesday evening when U.K and U.S banks re-open for business.

AUD EXCHANGE RATES:

AUD/USD – 0.7557

AUD/GBP – 0.5678

AUD/EUR – 0.6469

AUD/NZD – 1.0911

AUD/JPY – 82.877

USD/BTC – $7,296

OTHER MARKETS: 

All Ords (XAO) – 6,141

Gold – A$1716/oz

Silver –  A$21.80/oz

WTI – US$67.02/barrel

DATA RELEASES TODAY:

No economic data out

Bank Holidays In the U.S and U.K

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Topics: Report, Market

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