Compass Global Markets' Blog

Market Update - 28th April 2017 - Aussie Decline Accelerating, AUD/GBP Down 8% Since March

Posted by Patrick Downes on April 28, 2017 at 8:24 AM

The Aussie dollar has continued to come off the boil over the past two days with the local currency now trading well and truly below 0.7500 vs the Greenback and 0.5800 vs. the Pound - both levels we wouldn't have anticipated this time last month. While the economic data has been slim this week, the impetus for the lower AUD is probably more macro than anything with improvements in growth and inflation occurring elsewhere while the Australian economy continues to be quite stagnant - case in point Wednesdays CPI figures which came in at just under expectations at 0.5% for the quarter.

AUD/GBP has been the worst performer (or best depending on which side you're on) with the currency pair down a whopping 8% or 500 points since late March. Whether this trend continues depends on a number of factors, but certainly accelerating growth in the U.K is adding fuel to rumours that the Bank of England will need to raise interest rates in the short term to contain this rampaging inflation. U.K GDP figures released tonight will obviously provide another glimpse into how the U.K economy is going, so those clients with GBP exposures may wish to book spot deals or forwards today to avoid risks of further AUD/GBP downside.

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Topics: Report, Market

Market Update - 26th April 2017 - Aussie On The Back Foot Ahead Of CPI This Morning

Posted by Patrick Downes on April 26, 2017 at 8:35 AM

While we took a moment yesterday to remember those lost in war the rest of the world mostly carried on with business, however on the most part there wasn't really a great deal of economic data released yesterday with only U.S CB consumer confidence which came in around midnight last night. The data which is released monthly and is a survey of households and their relative economic situation came in marginally below last months reading which peaked at 125.6 (the highest level since the heady days of the tech boom) - read into that what you like.

The Aussie dollar has continued its slow and steady decline over the past 48 hours and is marginally lower across the board. AUD/GBP is probably the worst performer again down around 1% since the start of trade yesterday morning.

Aussie CPI is released at 11.30am and is expected to show around 0.6% growth for the quarter which would be around on trend for the past few years. Obviously CPI plays a huge factor in determing the Aussies direction so markets will be watching closely for any signs of increased inflation or deflation risk.

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Topics: Report, Market

Market Update - 24th April 2017 - EURO Up As Macron Leads In Early Election Counting

Posted by Patrick Downes on April 24, 2017 at 8:57 AM

Aux armes, citoyens,

Formez vos bataillons,

Marchons, marchons!

No you havn't just stumbled into a French language class, instead the French headed to the polling booths overnight to cast their vote in one of the mostly hotly contended Presidential elections in recent memory and it looks like the left leaning pro-Europe Macron will win via a run-off vote against the far right and very 'Trumpish' Le Pen.

The markets have reacted quite favourably towards the initial results with the Euro gaining around 1.2% vs. the Aussie dollar, while the French CAC looks set to open as much as 2% higher when trading resumes this afternoon.

Not much is on the agenda today data wise other than German IFO Business Climate numbers which are expected to come in unchanged around 112. Overall the figure which is a composite index based on surveyed manufacturers, builders, wholesalers, and retailers suggest things are improving in Germany with the gauge rising fairly consistently since 2014.

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Topics: Report, Market

Market Update - 21st April 2017 - Aussie Finds Some Stability Ahead of French Elections

Posted by Patrick Downes on April 21, 2017 at 9:33 AM

The Aussie dollar has stabilised somewhat over the past 24 hours with the Aussie trading at near identical levels to this time yesterday morning. The only exception to that is Aussie/Kiwi which is up around 1%. Equities and commodities also performed quite well overnight. The strongest performer being the French CAC (up nearly 1.5%) as a result perhaps of optimism that the left leaning Macron will win the French Presidential Elections held this weekend. U.K retail sales are the only major data release tonight.

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Topics: Report, Market

Market Update - 20th April 2017 - Aussie Remains Under Pressure, AUD/GBP Biggest Mover

Posted by Patrick Downes on April 20, 2017 at 9:13 AM

The Aussie dollars decline continued for a third straight day with the so called Aussie now dipping below 0.7500 vs. the Greenback. AUD/GBP an AUD/EUR have also moved lower as a result of improved inflation expectations and of course the calling of a snap election in the U.K. AUD/GBP remains the biggest mover having lost around 200 points or 3.3% since Tuesday - whilst the drop since 21st March is even more dramatic with AUD/GBP down a whopping 400 points or 6%.

Overnight the 'final' CPI reading for the Euro Area decreased marginally from 2% to 1.5% but remains at a reasonably solid pace given that between Jan 2015 and Jun 2016 growth went backwards for the most part. Ahead this evening is US manufacturing data along with a speech from Bank of England Governor Carney who will no doubt discuss the implication or the upcoming election and what support the Bank of England intends to provide to both the U.K economy and the Pound.

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Topics: Report, Market

Market Update - 19th April 2017 - Pound Surges On Calling of Shock Election

Posted by Patrick Downes on April 19, 2017 at 8:40 AM

AUD/GBP is the big move overnight losing close to two hundred points following the call of a snap election by current UK Prime Minister Theresa May. The aim of the snap election which will be held in just 7 weeks is to strengthen her grip on power via a broader parliamentary majority which will allow her more control to negotiate a Brexit which is beneficial to the U.K. With the Pound surging to 6 months highs its obvious traders liked what they heard and there may therefore be further headwind ahead for AUD/GBP. Clients wishing to cover GBP positions may consider Forward Contracts to do this, please call me to discuss.

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Topics: Report, Market

Market Update - 18th April 2017 - Chinese Growth Story Roars Back To Life, While U.S Growth Slows

Posted by Patrick Downes on April 18, 2017 at 9:56 AM

I hope you all enjoyed the extra long weekend and you're all of course feeling pleasantly rested; personally it was certainly very nice to have a four day break after what has been a pretty busy start to 2017.

China was just one of a handful of nations including Japan that didn't stop for the Easter break with the former actually delivering the only economic data released yesterday. That data included both quarterly GDP numbers and industrial production figures. Both showed pretty positive signs with Chinese GDP seemingly on the rebound from lows seen back in the July quarter of 2016, while industrial production appears to be once again hitting its stride with the latest figures being the fastest pace of growth since Jan 2015. The numbers certainly bode well for the Chinese bulls out there and not so well for the Chinese perma-bears who predict a hard landing is the only way the Chinese growth story will end. I for one am a strong believer that China is destined for a soft landing, or rather smooth transition towards a more consumer led economy, but all this will pan out over the next 10 years at minimum.

Other than this data, we also saw U.S economic numbers Friday night which really disappointed but at the same time probably won't do a great deal to change the Federal Reserves rate tightening cycle it embarked on around a year ago. AUD/USD however has rallied marginally from lows seen last week.

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Topics: Report, Market

12th April 2017 - Weekly Currency Market Report

Posted by Thomas Su on April 12, 2017 at 1:10 PM

 

The Market in Brief:

                                                                • AUD down against the majors.
                                                                • AUD Retail  Sales -0.1% V expected +0.3% whilst Trade Balance +3.57bn V expected +1.75bn and RBA leaves cash rate at 1.5% as expected.
                                                                • USD NFP +98,000 V expected +174,000. Unemployment Rate drops from 4.7% to 4.5%
                                                                • GBP data mixed

Market Events Due:

                                                            • GBP CPI y/y (Tue) Average Earnings Index 3m/y (Wed)
                                                            • AUD Employment Change (expected + 20,300 jobs) and Unemployment Rate (expected 5.9%) (Thur)
                                                            • USD PPI m/m (Thur) Prelim UoM Consumer Sentiment  CPI m/m Retail Sales m/m
                                                            • CNY Trade Balance (Thur)
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Market Update - 12th April 2017 - UK Inflation Stays On Track Dragging AUD/GBP Lower

Posted by Patrick Downes on April 12, 2017 at 8:36 AM

UK inflation overnight held at 3 year highs around 2.3% supporting the GBP and seeing AUD/GBP lower again for nearly a 12th straight day. The U.K economy has continued to rebound in the wake of so much bad news following Brexit and ofcourse the triggering of Article 50 last month. Whether this is just the start of a sustained GBP rally only time will tell, but certainly the signs are promising. Bank of England Governor Carney will speak at 6.00pm this evening with likely the majority of his speech to be dedicated to how the Bank of England can assist during it's transition away from the European Union.

Iron ore and other base commodities fell again over night which dragged on the Aussie, while stocks were mostly lower. The best performer was the U.K FTSE following that strong inflation reading.

Ahead tonight is further U.K data released around 6pm and 6.30pm respectively.

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Topics: Report, Market

CGM Weekly FX Update - 11th April 2017

Posted by Thomas Su on April 11, 2017 at 2:03 PM

 

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