Compass Global Markets' Blog

Market Update - 10th January 2019 - U.S Fed Minutes Show Further Rate Hikes No Certainty, AUD Bounces

Posted by Patrick Downes on January 10, 2019 at 8:55 AM

Please note that the commentary below is factual information provided to a group of readers as a web blog, and where an opinion is expressed by the author, it is GENERAL ADVICE only.

What Happened Overnight?:

The AUD is down against the Pound, Kiwi and Yen, but has moved more than half a percent higher vs. the U.S Dollar as the so called Greenback succumbed to a sell-off amid improved risk sentiment and minutes this morning from the U.S Federal Reserve that suggest further rate hikes are no certainty this year in the worlds largest economy. Markets are taking this as a sigh of a relief given the Fed's history of raising rates til the U.S economic bubble bursts; it happened in the '87 crash, the dot.com bubble and more recently during the GFC.

Upcoming Economic Data:

More economic data is due out this morning in Chinese CPI and PPI with both consumer and producer prices expected to contract as a result of a broad slowdown in the pace of economic growth in China. Commodities prices and equities were sold off all last year amid weaker Chinese economic data and trade tensions so any surprise to the upside here could see a solid bounce in commodities prices, the AUD and equities.

The local equities market looks set to open flat.

AUD EXCHANGE RATES:

AUD/USD – 0.7144

AUD/GBP – 0.5576

AUD/EUR – 0.6182

AUD/NZD – 1.0531

AUD/JPY – 77.221

USD/BTC – $3,986

OTHER MARKETS:

All Ords (XAO) – 5,838

Gold – A$1,802/oz

Silver –  A$21.95/oz

WTI – US$52.39/barrel

DATA RELEASES TODAY:

CNY – CPI & PPI at 12.30pm

USD - Fed Chair Powell Speaks at 4.00am (tomorrow morning)


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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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This report and must not be copied, either in whole or in part, or distributed to any other person.
All references to prices, amounts and currency are in Australian dollars unless otherwise noted.
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