Compass Global Markets' Blog

Market Update - 23rd January 2019 - Positive Sentiment Turns Negative As Trade Tensions Reheat

Posted by Patrick Downes on January 23, 2019 at 8:26 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.

Positive Turns Negative:

The positive sentiment which has dominated markets in the early part of the year appears to have slipped away overnight as China and the U.S again came to loggerheads over trade and IP. The negative risk sentiment saw a sell off in both equities and commodities including oil and copper while Gold not surprisingly surged. The AUD fared just as poorly and is down over half a percent right across the board.

World Economic Forum Kicks Off:

No economic data was released overnight, however the World Economic Forum in Davos, Switzerland kicked off overnight with impassioned speeches from a diverse range of speakers which included David Attenborough and NZ PM Jacinda Ardern. What comes of the WEF this year remains to be seen but it has too often become a gab fest with no real substance or follow through after the event ends.

AUD Complacency Is Dangerous: 

As mentioned above markets look decidedly more shaky today with volatility still wreaking havoc, those who took advantage of the AUD recently have done well, certainly you cannot become too complacent these days with forecasts from some Aussie economists for two rate cuts from the RBA this year. My personal opinion is two rate cuts are ridiculous and would only cause the AUD to crash and house prices to potentially start to run hot again. The economy while only slowly chugging along IS being supported by the lower AUD and therefore probably doesn't warrant any further rate cuts.

AUD EXCHANGE RATES:

AUD/USD – 0.7087

AUD/GBP – 0.5463

AUD/EUR – 0.6236

AUD/NZD – 1.0558

AUD/JPY – 77.579

USD/BTC – $3,572

OTHER MARKETS:

All Ords (XAO) – 5,924

Gold – A$1,804/oz

Silver –  A$21.53/oz

WTI – US$53.03/barrel

DATA RELEASES TODAY:

All - World Economic Forum in Davos


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Patrick Downes

Senior Corporate FX Dealer

Phone Patrick - 0431 278 632 

  Email Patrick: patrick@compassmarkets.com

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 DISCLOSURE AND DISCLAIMER - GENERAL ADVICE WARNING
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.
This report is provided for Australian residents only and is not intended for use by residents of any other country.

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