Compass Global Markets' Blog

Market Update - 12th January 2019 - AUD Declines Continue While China/U.S Trade Talks Edge Closer To Deadline

Posted by Patrick Downes on February 12, 2019 at 8:27 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.

AUD Declines Gain Momentum:

It would appear comments from RBA Governor Lowe last Wednesday continue to drag on the Aussie Dollar with a clear bias to the downside following comments that he'll watch future data closely and that the next move may be a cut if required. AUD/USD and AUD/EUR both declined around half a percent, while AUD/GBP fell 0.7% despite poorer than anticipated economic data out of the U.K overnight. The market may be seeing the poor data as a sign the next move from the Bank of England will also be a rate cut or some form of stimulus.

Stocks/Commodities Mixed: 

European stocks were the best performers overnight, up around 0.8-1%, while U.S equities excluding the Dow (down 0.21%) eked out very small gains. Commodities prices excluding iron ore have continued to come off the boil as "investors continue to weigh up the prospects for the success of this week’s high-level U.S.-China trade talks -- coming just days before the March 1 deadline for higher tariffs." Iron ore prices capped out at their full allowable gain yesterday at 8% on the Chinese iron ore futures market, with further gains expected today. The big iron ore and commodities stocks on the ASX have all had their earnings forecasts ratcheted up substantially and may be the one bright spot on our market this week with the banks, retail, and now aged care (Royal Commission into Aged Care kicked off yesterday) all under pressure.

Data Out Today:

Home loans numbers and NAB Business confidence are due out at 11.30am. Home loans numbers should decline again, while it's likely also that Business Confidence could be on the nose leading up the election.

AUD EXCHANGE RATES:

AUD/USD – 0.7033

AUD/GBP – 0.5460

AUD/EUR – 0.6230

AUD/NZD – 1.0447

AUD/JPY – 77.658

OTHER MARKETS:

All Ords (XAO) – 6,128

Gold – A$1,852/oz

Silver –  A$22.24/oz

WTI – US$52.65/barrel

DATA RELEASES TODAY:

AUD - Home Loans m/m and NAB Business Confidence at 11.30am

GBP - BOE Gov Carney Speaks at midnight

USD - Fed Chair Powell Speaks at 4.45am (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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The information provided in this report has been prepared without taking into account your particular objectives, financial situation or needs. You should consider whether our products are appropriate for you and read the FSG and PDS which are available on this website.
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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